Suppose the Market for Oranges Is Perfectly Competitive and Unregulated

question 3

Multiple Choice

Suppose the market for oranges is perfectly competitive and unregulated.Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated $1 per bushel of oranges.Suppose Q_D = 1000 - 100P and Q_S = -100 + 100P.The tax that would have to exist to achieve the socially optimal level of production would be

• A) $0
• B) $.50
• C) $1
• D) $2

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Definitions:

Uncertainty Reduction

The process of lessening ambiguity in communicating, often by gathering more information about others.

Social Support

The assistance and protection provided by others, especially through social relationships and networks.

Cultivate Attraction

Deliberately developing or increasing feelings of interest or appeal towards someone or something.

Socially Decenter

The ability to step outside one's own perspective to understand the thoughts and feelings of others.