The government is imposing an industrial pollution tax in an attempt to reduce carbon emissions. The cost of the tax to five major companies in the oil refining industry will be $50 million annually. In terms of reduced emissions, the annual benefits of the tax are valued at $10 per person. There are 125 million people directly affected by emissions from oil refineries owned by these companies. The total annual cost of this tax is _____________________ while the total annual benefit to society is _____________________.

The government is imposing an industrial pollution tax in an attempt to reduce carbon emissions. The cost of the tax to five major companies in the oil refining industry will be $50 million annually. In terms of reduced emissions, the annual benefits of the tax are valued at $10 per person. There are 125 million people directly affected by emissions from oil refineries owned by these companies. The total annual cost of this tax is _ while the total annual benefit to society is _.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter14: Environmental Economics

Section: Chapter Questions

Problem 1SQP

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A polluting firm has Marginal Abatement Costs as graphed below and is faced with an emissions tax = T*. Assuming the firm will behave in a way to minimize it's costs, what are the total costs the firm would incur given this tax policy? $ MAC T* A B E* Emissions C D Eo
Suppose a small country, Country X, is considering implementing a Carbon Tax to address environmental concerns and reduce carbon emissions. The government believes that such a tax will have an impact on the country's economic performance. Given the following data: Current annual carbon emissions: 500,000 metric tons The government proposes a carbon tax of $30 per metric ton of carbon emitted. Calculate the potential change in annual carbon tax revenue if the country successfully reduces its carbon emissions by 20% after the implementation of the Carbon Tax.
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