Author Question: If this pollution occurs, one way of reaching efficient production levels is by setting a Pigovian ... (Read 122 times)

jenna1 · **on:** Jun 29, 2018

If this pollution occurs, one way of reaching efficient production levels is by setting a Pigovian Tax. To achieve efficiency with this tax means that the tax must equal the

A) marginal social cost.
B) marginal private cost.
C) marginal private benefit.
D) marginal external cost.

Question 2

The labor supply curve is backward bending because

A) as the wage rate rises, the substitution effect becomes larger than the income effect.
B) as the wage rate rises, the income effect becomes larger than the substitution effect.
C) an increase in the wage rate shifts the supply of labor curve leftward at higher wages.
D) an increase in the wage rate shifts the supply of labor curve rightward at higher wages.