Refer to Scenario 14.4. Suppose that a pollution tax is imposed on each unit of a firm's output. The number of workers hired
A) will decrease.
B) will increase.
C) will not change.
D) will change in an indeterminate fashion.
Question 2
Plants, trees, and soils naturally emit carbon dioxide (CO2 ) that enters the atmosphere.
To form a benchmark level for this greenhouse gas, we can determine the amount of CO2 that would end up in the atmosphere if there were no human activity on the planet. Suppose naturally occurring CO2 emissions are 5 million tons per year, the social discount rate is 5, and the stock dissipation rate is 2. What is the eventual level of CO2 in the atmosphere if these natural emissions continue at this rate forever? A) 100 million tons
B) 250 million tons
C) 25 million tons
D) We do not have enough information to answer this question.
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