Question

In: Economics

Aiming at reducing air pollution, the government decided to reduce the country’s use of gasoline by...

Aiming at reducing air pollution, the government decided to reduce the country’s use of gasoline by imposing an $1 tax on each gallon of gasoline sold. Are consumers of gasoline helped or hurt by the tax? (Hint- draw the diagram to see if consumer surplus increases or decreases)

A. Consumer surplus is unchanged

B. Consumers are helped

C. Consumers are hurt

D. Not enough information to conclude

Aiming at reducing air pollution, the government decided to reduce the country’s use of gasoline by imposing an $1 tax on each gallon of gasoline sold.

Briefly explain why the tax on gasoline sold can help reduce air pollution?

Aiming at reducing air pollution, the government decided to reduce the country’s use of gasoline by imposing an $1 tax on each gallon of gasoline sold.

Are producers of gasoline helped or hurt by the tax? (Hint- draw the diagram to see if producer surplus increases or decreases)

A.

Producer surplus are unchanged
B.

Not enough information to conclude
C.

Producers are hurt
D.

Producers are helped

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Suppose the government decides to raise the gasoline tax as a way of reducing air pollution...
Suppose the government decides to raise the gasoline tax as a way of reducing air pollution and traffic congestion to their optimal levels. Which of the following describes why Pigovian taxes, such as gasoline tax, are unlike most other taxes?   Other taxes are typically used to cover general spending, but funds from corrective taxes can only be used to alleviate pollution   Corrective taxes bring the allocation of resources closer to the social optimum, and thus improve economic efficiency...
Suppose that the federal government has decided that air pollution produced by gasoline should be reduced....
Suppose that the federal government has decided that air pollution produced by gasoline should be reduced. To achieve this objective, the federal government is considering the introduction of an additional tax of 50 cents per litre on gasoline. Using a demand and supply diagram illustrate the effect of such a tax on the price of gasoline. Will the consumers of gasoline or the producers of gasoline bear the highest tax burden (incidence)? Explain under what conditions this policy will be...
Suppose that the federal government has decided that air pollution produced by gasoline should be reduced....
Suppose that the federal government has decided that air pollution produced by gasoline should be reduced. To achieve this objective, the federal government is considering the introduction of an additional tax of 50 cents per litre on gasoline. Using a demand and supply diagram illustrate the effect of such a tax on the price of gasoline. Will the consumers of gasoline or the producers of gasoline bear the highest tax burden (incidence)? Explain under what conditions this policy will be...
Suppose that the federal government has decided that air pollution produced by gasoline should be reduced....
Suppose that the federal government has decided that air pollution produced by gasoline should be reduced. To achieve this objective, the federal government is considering the introduction of an additional tax of 50 cents per litre on gasoline. Using a demand and supply diagram illustrate the effect of such a tax on the price of gasoline. Will the consumers of gasoline or the producers of gasoline bear the highest tax burden (incidence)? Explain under what conditions this policy will be...
4. The congress and the governor decide that they should reduce environmental pollution reducing the use...
4. The congress and the governor decide that they should reduce environmental pollution reducing the use of gasoline. They impose a tax of $ 0.10 on each liter of gasoline sold. a. Should they impose the tax on producers or consumers? Explain carefully using supply and demand diagrams. (4 points) b. If the demand were more elastic, would the tax be more or less effective? your purpose of reducing gasoline consumption? Explain using both text and diagram. (4 points) c....
Industrial standards and methods followed for reducing air pollution
Industrial standards and methods followed for reducing air pollution
An increase in the use of quotas is expected to: A) reduce the country’s current account...
An increase in the use of quotas is expected to: A) reduce the country’s current account balance, if other governments do not retaliate. B) increase the country’s current account balance, if other governments do not retaliate. C) have no impact on the country’s current account balance unless other governments retaliate. D) increase the volume of a country’s trade with other countries.
Your friend believes that the government should not try to reduce the pollution amount in companies....
Your friend believes that the government should not try to reduce the pollution amount in companies. He believes every single environmental regulation is bad. Write a response (5-8 sentences) about why it is socially efficient for there to be efforts to reduce pollution. (Make sure to use some economic terms in your response).
Suppose China wishes to reduce the amount of air pollution generated by electrical plants. The marginal...
Suppose China wishes to reduce the amount of air pollution generated by electrical plants. The marginal benefit of electricity is P = 464, 000 − 200Q and the producers’ marginal cost is P = 32, 000 + 70Q. The air pollution presents a negative externality and the marginal external cost of each unit is P = 75.6Q. 1. In the market equilibrium, what is the total cost of the pollution externality? 2. In the socially optimal outcome, what is the...
Economics Two firms are ordered by the federal government to reduce their pollution levels Firm A’s...
Economics Two firms are ordered by the federal government to reduce their pollution levels Firm A’s marginal costs associated with pollution reduction is MC=20+4Q and firm B’s MC=10+8Q The marginal benefit of pollution reduction is MB=400-4Q Compare the social efficiency of three possible outcomes: require all firms to reduce pollution by the same amount; charge a common tax per unit of pollution; or require all firms to reduce pollution by the same amount, but allow pollution permits to be bought...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT