1. Credit: Matthew Kahn Which of the following statements are true? (pick all) The social cost of the pollution created by a steel factory: A. Is larger if the wage paid to the factory workers is higher. B. Would shrink if the same factory moved from a populated area to a rural area. C. Is smaller if the exposed population have a large b₁ based on the equation: sickness bob₁ × (pollution exposure) D. Would shrink if the government introduces a pollution tax. E. Is likely to increase during economic booms and to shrink during recessions.

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter12: Environmental Protection And Negative Externalities
Section: Chapter Questions
Problem 41P: Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once...
Question
1. Credit: Matthew Kahn Which of the following statements are true? (pick all) The
social cost of the pollution created by a steel factory:
A. Is larger if the wage paid to the factory workers is higher.
B. Would shrink if the same factory moved from a populated area to a rural area.
C. Is smaller if the exposed population have a large b₁ based on the equation:
sickness bob₁ × (pollution exposure)
D. Would shrink if the government introduces a pollution tax.
E. Is likely to increase during economic booms and to shrink during recessions.
Transcribed Image Text:1. Credit: Matthew Kahn Which of the following statements are true? (pick all) The social cost of the pollution created by a steel factory: A. Is larger if the wage paid to the factory workers is higher. B. Would shrink if the same factory moved from a populated area to a rural area. C. Is smaller if the exposed population have a large b₁ based on the equation: sickness bob₁ × (pollution exposure) D. Would shrink if the government introduces a pollution tax. E. Is likely to increase during economic booms and to shrink during recessions.
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