If the Government Regulator Has Chosen a Target Level of Total

question 5

Multiple Choice

If the government regulator has chosen a target level of total emissions to be 400 units per year,________ permits will need to be issued and they will trade for ________ per permit.

• A)100;$200
• B)100;$120
• C)400;$200
• D)400;$120

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Definitions:

Excise Tax

A type of tax charged on goods and services produced within a country, often imposed on specific items like tobacco and alcohol.

Demand Curve

A graph showing the relationship between the price of a good or service and the quantity demanded by consumers, typically downward-sloping.

Supply Curve

A graphical representation showing the relationship between the price of a good or service and the quantity of it that producers are willing and able to sell.

Equilibrium Quantity

The quantity of goods or services at which quantity demanded equals quantity supplied, leading to market equilibrium.