Figure 10-2 -Refer to Figure 10-2.Suppose That the Production of Plastic Creates

question 308

Multiple Choice

Figure 10-2
-Refer to Figure 10-2.Suppose that the production of plastic creates a social cost which is depicted in the graph above.If the government wanted to force the firm to internalize the cost of the externality,what action should it take?

• A) Impose a tax of $1.50 per unit of plastic.
• B) Impose a tax of $2 per unit of plastic.
• C) Impose a tax of $6 per unit of plastic.
• D) Offer a subsidy of $1.50 per unit of plastic.

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Definitions:

Collaborative Structure

An organizational format that promotes teamwork and joint efforts across departments or groups to achieve common objectives.

Matrix Structure

A management approach that organizes employees by both function and product, allowing for more efficient communication across departments.

Binding Minimum Wage

A fixed minimum salary that employers are legally obligated to pay their employees, typically set above the equilibrium wage, leading to potential surpluses in labor.

Labor Market

The marketplace where employers find workers and workers find jobs, characterized by the supply and demand for labor.