Please Answer True or False and Explain

question 74

Essay

Please answer true or false and explain.
(A)A new technology is discovered that results in all new cars producing 50 percent less pollution.People are better off because the air they breathe is cleaner,and hence GDP will increase to reflect the fact that people are better off.
(B)A new technology is discovered that results in all new cars producing 50 percent less pollution.As a result,there is a reduction in the number of visits people make to the doctor to complain of breathing difficulties.People are better off because they are healthier,and hence GDP will increase to reflect the fact that people are better off.
(C)A new technology is discovered that results in all new cars producing 50 percent less pollution.The federal government offers all people owning cars built before 1980 a $1,000 rebate on the purchase of a new car in an attempt to remove polluting cars from the road.One thousand people accept the offer and buy new cars worth $25 million.GDP increases by the value of the cars sold,which is $25 million,and the total amount of the government expenditure on the rebate program,which is $1 million.

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Definitions:

Producer Surplus

The discrepancy between what producers are ready to take for a product or service and the real amount they get.

Tax

A required contribution or another kind of monetary levy imposed by a government body on a taxpayer to underpin government expenditure and different public spending initiatives.

Deadweight Loss

Deadweight loss refers to the loss in economic efficiency that occurs when the equilibrium for a good or service is not achieved or is unattainable.

Consumer Surplus

The gap in the total amount consumers are willing to invest in a product or service and the amount they end up paying.