Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

State whether each of the following statements is True or False. Carefully explain your answer. (c) Suppose the government decides to impose a per unit

State whether each of the following statements is True or False. Carefully explain your answer.

(c) "Suppose the government decides to impose a per unit tax on petrol consumption to compensate for the environmental damage that arises due to the CO2 emissions. Assume that the tax is chosen to exactly offset the external damage created by petrol consumption. This tax will, in general, increase the price of petrol paid by the consumers. The resulting market equilibrium cannot be efficient unless consumers are compensated for the price increase caused by the tax" (3 marks)

(d)"During a recession, some people who lose their jobs choose to drop out of the labour force completely, even though they would prefer to remain employed if the jobs were available. This makes the official unemployment rate statistic less reliable for understanding the dynamics of the labour market." (3 marks)

could you please show me the correct answers to these that would garner full marks. thank you.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Environmental And Natural Resource Economics International Edition

Authors: Thomas H Tietenberg, Lynne Lewis

10th Edition

1292060794, 9781292060798

More Books

Students also viewed these Economics questions

Question

What is the difference between independent and dependent demand?

Answered: 1 week ago

Question

1. Let a, b R, a Answered: 1 week ago

Answered: 1 week ago

Question

2. How do I perform this role?

Answered: 1 week ago