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1-Overfishing along the coastline of Helsking village led the government to impo

ID: 1114929 • Letter: 1

Question

1-Overfishing along the coastline of Helsking village led the government to impose a fee on the boats used for fishing. The fishermen were charged $50 on each boat they sent out for fishing. The following table shows the total pounds of fish caught per hour and the number of boats used for fishing.
Table 13.2

Number of boats per hour

Total pounds of fish caught per hour

0

    0

1

100

2

180

3

230

4

270

5

295

6

300

Refer to Table 13.2. Suppose fish sells for $1 per pound. If each fisherman decides whether or not to fish based on the average catch, what is the profit that each fisherman earns?

A.

0

B.

$5,000

C.

$500

D.

$3,000

E.

$1,000

2-Which of the following is a measure taken by the government to internalize externalities?

A.

Tariffs

B.

Income Tax

C.

Cap and trade

D.

Deficit financing

E.

Value Added Tax

Number of boats per hour

Total pounds of fish caught per hour

0

    0

1

100

2

180

3

230

4

270

5

295

6

300

Explanation / Answer

Answer:- Refer to Table 13.2. Suppose fish sells for $1 per pound. If each fisherman decides whether or not to fish based on the average catch, what is the profit that each fisherman earns?

Correct Answer:- A:- 0

Answer:- Which of the following is a measure taken by the government to internalize the externalities

Correct Answer:- C:-

Cap and trade

Reason:- caps and taxes control the externalities.

Cap and trade