-Refer to Above Figure in Which Negative Externality Existed

question 93

Multiple Choice

-Refer to above figure in which negative externality existed. The government imposes a $1.00 pollution tax on the producer. Supply shifts leftward.

• A) This tax will be shifted entirely to the consumer.
• B) This tax will be borne entirely by the producer.
• C) The amount of the tax shifted to the consumer depends on the consumer's reaction.
• D) The tax will be divided into equal amounts between consumer and producer.

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Definitions:

Asset Accounts

Accounts that record the resources owned or controlled by a company that have future economic value.

Journal Entry

An accounting transaction recorded in a company's financial records, which includes a description, the accounts affected, and the amounts debited and credited.

Credited

Recognized or recorded as an increase in assets or a decrease in liabilities in accounting records.