PRICE (Dollars per unit) 3.00 2.80 2.07 1.50 Social Cost 48 60 76 100 QUANTITY (Units of tobacco) Supply Demand Refer to Figure 10-1. This graph represents the tobacco industry. If the government wants to internalize the externality, how much should the tax or subsidy be? a. a per unit subsidy of $1.30 O b. a per unit subsidy of $0.57 Oc. a per unit tax of $1.30 O d. a per unit tax of $0.57
PRICE (Dollars per unit) 3.00 2.80 2.07 1.50 Social Cost 48 60 76 100 QUANTITY (Units of tobacco) Supply Demand Refer to Figure 10-1. This graph represents the tobacco industry. If the government wants to internalize the externality, how much should the tax or subsidy be? a. a per unit subsidy of $1.30 O b. a per unit subsidy of $0.57 Oc. a per unit tax of $1.30 O d. a per unit tax of $0.57
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Qq.37.
Subject :- Economy

Transcribed Image Text:Figure 10-1
PRICE (Dollars per unit)
3.00
2.80
2.07
1.50
Social Cost
48 60 76 100
QUANTITY (Units of tobacco)
Supply
Demand
Refer to Figure 10-1. This graph represents the tobacco industry. If the
government wants to internalize the externality, how much should the tax or
subsidy be?
a. a per unit subsidy of $1.30
O b. a per unit subsidy of $0.57
Oc. a per unit tax of $1.30
Od. a per unit tax of $0.57
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