Government intervention in markets: แบบฝึกหัด

• a.

  It is a tax levied directly on consumer income

• b.

  The tax amount remains constant regardless of the price

• c.

  The tax is calculated as a percentage of the selling price

• d.

  The tax causes a parallel shift in the supply curve

• a.

  Total pollution will remain constant as firms will simply trade existing permits

• b.

  The government will experience a fall in tax revenue from firms

• c.

  The price of permits will rise, increasing the incentive for green investment

• d.

  The price of permits will fall, making it cheaper for firms to pollute

• a.

  The burden depends on the elasticity of supply, irrespective of demand elasticity.

• b.

  Producers bear the entire burden of the tax (\(£2\)).

• c.

  The burden is shared equally between consumers and producers.

• d.

  Consumers bear the entire burden of the tax (\(£2\)).

• a.

  Permits lead to a greater degree of governmental control over resource allocation than quotas.

• b.

  Permits ensure pollution abatement (reduction) is carried out efficiently by firms with the lowest marginal cost of reduction.

• c.

  Permits require less administrative cost and are simpler to enforce than direct regulations.

• d.

  Permits bypass the need for setting a socially optimal level of pollution since the market determines the price.

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