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6. which is false for tx v subsidy v deposit systems?

  • the sibsidywill not cause total vinyl reduction to be done CE
  • in the long term (when firms can enter and exit their industries) the subsidy wil cause more vinyl to be used than the tax
  • the subsidy progra will give firs an incentive to innovate and find cheaper vinyl alternative.

7. what is false for subsidy against ta emission policies, or a deposit refund system?

  • the subsidy program wont give firms an incentive to innoate and find cheaper vinyl alternatives
  • in the long run (when firms can enter and exit the industries) the subsidy will cause more vinyl to be used than the tax
  • the subsidy will cause ttal vinyl reduction to be done cost effectively

8. which statement is true for an emission tax policy?

  • firms end up paying a tax bill that i sgreater than the total dmaage they cause
  • firms will prefer this policy to a uniform standard that causes them to reduce pollution by the same amount
  • this policy is not cost effective becuase every fir pays the same tax rate on its pollution
  • policy yields fixedd levels of clean up in the face of uncertain change sin the firms cost curve

9. if the EPA is uncertain about MAC curves, which is true for emission taxes?

  • with the tax, the EPA will be uncertain about how much emission redution will ensue
  • with the tax, the EPA will be uncertain about the MAC costs borne by the power plants

10. for a gov with uncertainty about MAC curves who are trying to reduce dry cleaners pollution, what is true about using emission taxes?

  • with the tax the giv will be uncertain about how much emission reduction will ensue
  • with the tax the gov will be uncertain about what the marginal abatement cost will be that the dry cleaners end up bearing
  • the gov should choose he tax if the MD curve slopes sharply upward