To Reduce the Level of Pollution Emitted by Firms in an Industry,the

question 9

Multiple Choice

To reduce the level of pollution emitted by firms in an industry,the government could use a cap-and-trade policy or a carbon tax.Which of the following is true?

• A) The price of the good sold will rise with the carbon tax policy but not with the cap-and-trade policy.
• B) The quantity of the good sold will fall with the carbon tax policy but not with the cap-and-trade policy.
• C) The price of the good sold will rise under either policy, but there will be no change in the level of production.
• D) The quantity of the good sold will fall under either policy, but there will be no change in the price of the good.
• E) The price of the good sold will rise under either policy, and there will be a reduction in the level of production.

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Definitions:

Master Budgets

Comprehensive financial planning documents that include both operational and financial budgets, providing a complete picture of organizational financial activities.

Quantities Purchased

The total number of units bought during a given period, often tracked for inventory or supply chain management.

Raw Materials

Basic materials that are used in the production process of goods, often transformed into finished products.

Fixed Overhead

Costs that do not vary with the level of production or sales, including rent, salaries, and insurance expenses.