If the Government Taxes Producers That Create Pollution,the Government's Policy

question 212

Multiple Choice

If the government taxes producers that create pollution,the government's policy

• A) allows the producers to pollute more by increasing their costs.
• B) results in less production because the producers' costs have risen.
• C) eliminates pollution entirely by shifting the supply curve leftward.
• D) allows the firms to pass along higher costs but doesn't cut pollution.
• E) forbids the firms from passing along higher costs.

---

Definitions:

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to offer for sale at those prices.

Demand Curve

A graph that shows the relationship between the price of a good and the quantity of that good that consumers are willing to purchase.

Ceteris Paribus

A Latin phrase meaning "all other things being equal," used in economics to isolate the effect of one variable change.

Producer Surplus

The gap between what sellers are prepared to take for a product or service and the actual amount they get.