Narrbegin Exhibit 10

question 3

Multiple Choice

Narrbegin Exhibit 10.2 Carbon emissions as an externality
-In Exhibit 10.2, which of the following is likely to be true? Assume that the private supply is 'Supply 1' and the supply including carbon tax is 'Supply 2'.

• A) Global warming is not a local problem and firms should not be taxed.
• B) Since the discharge of the carbon dioxide in the atmosphere increased health care costs, the policy measures should be adopted to shift the supply curve 'Supply 1' to the left ('Supply 2').
• C) The carbon tax will increase the price from $30 to $60 per unit.
• D) The demand is negatively related to the supply.

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Definitions:

Unemployment

The situation when individuals who are capable of working and willing to work are unable to find employment.

Long-run Phillips Curve

An economic concept stating that in the long run, there is no trade-off between inflation and unemployment; the curve is vertical at the natural rate of unemployment.

Inflation

How rapidly the across-the-board prices of goods and services increase, impairing fiscal buying ability.

Unemployment

Unemployment occurs when individuals who are capable of working and are looking for a job are unable to find employment. It is a key economic indicator.