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.

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Definitions:

Whistle Blowing

Involves an employee or former employee of an organization calling public attention to serious wrongdoing or danger within the organization.

Moral Quality Circles

Groups focused on identifying, discussing, and solving ethical issues in the workplace to promote integrity and moral behavior.

Socially Responsible

A principle where individuals and organizations act in the best interests of society by taking into consideration the impact of their activities on the environment, consumers, employees, communities, and other stakeholders.

Organizational Practices

Established methods, procedures, or routines used within an organization to achieve its objectives.