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Unformatted text preview: of just one of the commodities.
D) None of the above.
94. Suppose an emissions tax is imposed on all dairy farms in Wisconsin. This tax would
have the effect of:
A) increasing the level of emissions.
B) reducing the supply of milk in Wisconsin.
C) increasing the supply of milk in Wisconsin.
D) encouraging the dairy farmers to lower prices.
95. Which statement is both correct and most informative
A) Prices are too high
B) Prices are signals that coordinate production and consumption.
C) Prices are signals that always push consumers and producers toward efficiency
definition of prices Version 1 Page 20 96. Suppose Un's rubber factory belches black smoke in the air during the production
process. If the government forces the plant to internalize this external cost with a
pollution tax, then we would expect
A) The social marginal cost of Un producing rubber will increase
B) The firm's supply curve for rubber will shift to the right
C) The demand curve for rubber will shift to the left because the price of rubber will
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- Fall '07