1. The Government of Yokuku considers applying one of the following policies: a tax or a standard, in order to reduce pollution level from P to Po. The government economist drew the following graph, representing the marginal abatement cost (MAC) to the polluters, the marginal damage to the society (MD), the optimal tax level (Tax level) and the socially optimal pollution level (Po). 1.1 What is the total abatement cost to the polluter under the tax policy? a. A b. B c. A+B d. A+B+C 1.2 What is the total abatement cost to the polluter under the standard policy? a. A b. B c. A+B d. A+B+C 1.3 What is the total damage cost under the tax policy? a. A b. B c. A+B d. A+B+C 1.4 What is the total damage cost under the standard policy? a. A b. B c. A+B d. A+B+C 1.5 What is the total tax cost under the standard policy? a. There is no tax cost under the standard policy b. B c. C d. B+C 1.6 What is the total tax cost under the tax policy? a. There is no tax cost under the tax policy b. B c. C d. B+C 1.7 What is the total social cost under tax policy? a. A+2B+C b. A+B c. B+C d. A+B+C 1.8 What is the total social cost under standard policy? a. A+2B+C b. A+B c. B+C d. A+B+C 1.9 Which environmental policy is more socially efficient? a. Tax b. Standard c. Both tax and standard policies are equally efficient 1.10 What is the difference in social cost between the tax policy and the standard policy? a. A+B+C b. B+C c. A+C d. C
1. The Government of Yokuku considers applying one of the following policies: a tax or a standard, in order to reduce pollution level from P to Po. The government economist drew the following graph, representing the marginal abatement cost (MAC) to the polluters, the marginal damage to the society (MD), the optimal tax level (Tax level) and the socially optimal pollution level (Po). 1.1 What is the total abatement cost to the polluter under the tax policy? a. A b. B c. A+B d. A+B+C 1.2 What is the total abatement cost to the polluter under the standard policy? a. A b. B c. A+B d. A+B+C 1.3 What is the total damage cost under the tax policy? a. A b. B c. A+B d. A+B+C 1.4 What is the total damage cost under the standard policy? a. A b. B c. A+B d. A+B+C 1.5 What is the total tax cost under the standard policy? a. There is no tax cost under the standard policy b. B c. C d. B+C 1.6 What is the total tax cost under the tax policy? a. There is no tax cost under the tax policy b. B c. C d. B+C 1.7 What is the total social cost under tax policy? a. A+2B+C b. A+B c. B+C d. A+B+C 1.8 What is the total social cost under standard policy? a. A+2B+C b. A+B c. B+C d. A+B+C 1.9 Which environmental policy is more socially efficient? a. Tax b. Standard c. Both tax and standard policies are equally efficient 1.10 What is the difference in social cost between the tax policy and the standard policy? a. A+B+C b. B+C c. A+C d. C
Chapter9: Public Finance And Public Choice
Section: Chapter Questions
Problem 3P
Related questions
Question
1. The Government of Yokuku considers applying one of the following policies: a tax
or a standard, in order to reduce pollution level from P to Po.
The government economist drew the following graph, representing the marginal abatement cost
(MAC) to the polluters, the marginal damage to the society (MD), the optimal tax level (Tax level) and
the socially optimal pollution level (Po).
1.1 What is the total abatement cost to the polluter under the tax policy?
a. A
b. B
c. A+B
d. A+B+C
1.2 What is the total abatement cost to the polluter under the standard policy?
a. A
b. B
c. A+B
d. A+B+C
1.3 What is the total damage cost under the tax policy?
a. A
b. B
c. A+B
d. A+B+C
1.4 What is the total damage cost under the standard policy?
or a standard, in order to reduce pollution level from P to Po.
The government economist drew the following graph, representing the marginal abatement cost
(MAC) to the polluters, the marginal damage to the society (MD), the optimal tax level (Tax level) and
the socially optimal pollution level (Po).
1.1 What is the total abatement cost to the polluter under the tax policy?
a. A
b. B
c. A+B
d. A+B+C
1.2 What is the total abatement cost to the polluter under the standard policy?
a. A
b. B
c. A+B
d. A+B+C
1.3 What is the total damage cost under the tax policy?
a. A
b. B
c. A+B
d. A+B+C
1.4 What is the total damage cost under the standard policy?
a. A
b. B
c. A+B
d. A+B+C
1.5 What is the total tax cost under the standard policy?
a. There is no tax cost under the standard policy
b. B
c. C
d. B+C
1.6 What is the total tax cost under the tax policy?
a. There is no tax cost under the tax policy
b. B
c. C
d. B+C
1.7 What is the totalsocial cost under tax policy?
a. A+2B+C
b. A+B
c. B+C
d. A+B+C
1.8 What is the total social cost under standard policy?
a. A+2B+C
b. A+B
c. B+C
d. A+B+C
1.9 Which environmental policy is more socially efficient?
a. Tax
b. Standard
c. Both tax and standard policies are equally efficient
1.10 What is the difference in social cost between the tax policy and the standard policy?
a. A+B+C
b. B+C
c. A+C
d. C
b. B
c. A+B
d. A+B+C
1.5 What is the total tax cost under the standard policy?
a. There is no tax cost under the standard policy
b. B
c. C
d. B+C
1.6 What is the total tax cost under the tax policy?
a. There is no tax cost under the tax policy
b. B
c. C
d. B+C
1.7 What is the total
a. A+2B+C
b. A+B
c. B+C
d. A+B+C
1.8 What is the total social cost under standard policy?
a. A+2B+C
b. A+B
c. B+C
d. A+B+C
1.9 Which environmental policy is more socially efficient?
a. Tax
b. Standard
c. Both tax and standard policies are equally efficient
1.10 What is the difference in social cost between the tax policy and the standard policy?
a. A+B+C
b. B+C
c. A+C
d. C
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Microeconomics: Principles & Policy
Economics
ISBN:
9781337794992
Author:
William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Microeconomics: Principles & Policy
Economics
ISBN:
9781337794992
Author:
William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:
Cengage Learning
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning