When a Tax on Output Is Imposed to Internalise the External

question 65

True/False

When a tax on output is imposed to internalise the external costs of pollution, the supply curve shifts down by the amount of the tax.

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Definitions:

Utility Function

A mathematical representation of how different goods or bundles of goods provide satisfaction to a consumer.

Spaghetti Consumption

The amount of spaghetti eaten, often measured in terms of quantity over a specific time period.

Juliet

A reference to a major character from William Shakespeare's play "Romeo and Juliet," often symbolizing young love or tragic romance.

Utility Function

A mathematical representation of how consumer preferences lead to the selection of goods and services in order to achieve the highest level of satisfaction.