bk 3 pt. 2

Question 1

production tax

Answer 1

compulosry levy imposed on the production of goods and services. producers have the legal responsibility to pay the tax to the government which is a fixed fee per unit output produced.

Question 2

pollution tax (no graph)

Answer 2

compulsory levy imposed on producers where firms have to pay the government a fixed fee per unit of pollution generated

Question 3

subsidies

Answer 3

payment made by the government to producers to encourage the production of certain goods or services, but not made in exchange for any goods or services.

Question 4

tradable permits (no graph)

Answer 4

permits to pollute issued to firms by a government

Question 5

direct provision

Answer 5

government supplies the good directly to consumers

Question 6

regulation (total ban)

Answer 6

use of the law to compel certain actions to be taken by consumers or firms. those who violate the law would face punishment in the form of fines or imprisonment.

Question 7

quota

Answer 7

government regulates the quantity of a good that can be offered for sale

Question 8

lemon law (no graph)

Answer 8

regulate the quality producers have to meet or force sellers to replace defective goods

Question 9

public education

Answer 9

providing information to educate consumers on the true marginal private benefits on consuming merit/demerit goods.