Many States Charge a 10-Cent Deposit on Every Can of Soda

question 107

Multiple Choice

Many states charge a 10-cent deposit on every can of soda sold.A purchaser pays an extra 10 cents per can and will get his money back by returning the empty can to a store.This policy encourages recycling by

• A)increasing the supply of recyclable materials.
• B)shifting in the demand curve for canned soda.
• C)raising the opportunity cost of discarding empty cans.
• D)taxing the production of canned soda.

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Definitions:

Volatile

Characterized by or subject to rapid or unexpected changes, especially in the context of financial markets or securities prices.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a specific time period.

Strike Price

The set price at which an option contract can be bought or sold when it is exercised.

Pre-Tax Net Profit

The amount of profit earned by a company before taxes are deducted.