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Author Question: In the figure above, if a pollution tax is imposed that is equal to the marginal external cost of ... (Read 120 times)

nenivikky

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on: Jun 29, 2018
In the figure above, if a pollution tax is imposed that is equal to the marginal external cost of pollution, then when the market is in equilibrium, the deadweight loss is ________ thousand per month.
 
  A) 250
  B) 125
  C) 150
  D) 50
  E) zero

Question 2

How are skilled and unskilled workers in an economy likely to be affected if firms adopt skill-biased technologies?
 
  What will be an ideal response?


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shayla

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Reply #1 on: Jun 29, 2018
Answer to Question 1

E

Answer to Question 2

A skill-biased technology change increases the productivity of skilled workers relative to that of unskilled workers. This increases the marginal productivity of skilled workers, causing the demand for their labor and their wages to increase. Conversely, such technology decreases the labor demand for unskilled workers and lowers their wages.


nenivikky

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Reply #2 on: Jun 29, 2018
Thank you :)


shayla

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Reply #3 on: Jun 29, 2018
Happy to help you


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