Suppose a Tax Equal to the Value of the Marginal

question 98

Multiple Choice

Suppose a tax equal to the value of the marginal external cost at the optimal output is imposed on a pollution generating good. All of the following will result from the tax except

• A) an increase in the equilibrium market price.
• B) a decrease in the equilibrium quantity produced and consumed.
• C) a decrease in market supply of the good.
• D) an increase in the demand for the good.

---

Definitions:

Irrational Fear

An exaggerated or unfounded fear towards objects, activities, or situations that poses little to no actual danger.

Repressed Childhood

A psychological condition wherein memories of early childhood, often traumatic, are unconsciously blocked from conscious recollection.

Conditioning Perspective

A viewpoint in psychology that emphasizes the role of learning in the acquisition of behaviors and mental processes.

Fear Of Darkness

A common anxiety disorder characterized by an irrational and excessive fear of the dark, officially known as nyctophobia.