Asked by Maria Arias on May 03, 2024
Verified
Refer to Figure 19.5.2 above. Once consumers and firms develop awareness of the benefits of reducing energy consumption,
A) a tax on emissions is no longer necessary.
B) a tax on emissions is still necessary but it would be lower than before.
C) a tax on emissions needs to be larger to obtain the socially optimal level of industry output.
D) taxes should turn to subsidies.
Tax On Emissions
A governmental levy placed on the emission of pollutants, intended to reduce environmental harm.
Socially Optimal Level
A state where resources are allocated in the most efficient manner from the standpoint of society as a whole.
Industry Output
The total production of goods and services by all firms within a specific industry.
- Expound on the significance of public policy and behavioral economics in the management of energy consumption and reduction of environmental impacts.
Verified Answer
DG
Denaya GlantonMay 03, 2024
Final Answer :
B
Explanation :
Even though consumers and firms have developed awareness of the benefits of reducing energy consumption, a tax on emissions is still necessary to ensure that the socially optimal level of industry output is achieved. However, the tax would be lower than before as a result of the increased awareness and the resulting decrease in emissions.
Learning Objectives
- Expound on the significance of public policy and behavioral economics in the management of energy consumption and reduction of environmental impacts.
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