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:

Prosocial Motivation

The desire to benefit others or contribute to the welfare of a group or society.

Skill Variety

The opportunity to do a variety of job activities using various skills and talents.

Job Complexity

The degree to which a job requires a variety of different activities involving multiple skills and talents.

Skill Variety

The degree to which a job requires a range of different activities and skills to carry out the work.