Coal-fired power plants like Duke, Southern, and the Tennessee Valley Authority

Question

Coal-fired power plants like Duke, Southern, and the Tennessee Valley Authority are charged a carbon tax for using coal as a fuel source. Coal emits the most greenhouse gases when it burns. Each household serviced by these plants is taxed an additional $1,400.

a) Calculate the percentage increase in energy cost, due to the carbon tax, for a family of four making $28,000 per year?

__%

b) Calculate the percentage increase in energy cost, due to the carbon tax, for a family of four making $56,000 per year?

__%

Explanation / Answer

a) In the first case when additional $1400 tax is imposed for making greenhouse gases there will be 5% increase in energy cost. Because when a 4 members family already making $28000 per year.

b) If a family of four making the energy cost of $56,000 per year then $1400 increase in tax in energy cost will increase the energy cost by 2.5% per year. If $1400 dollar tax is increased with respect to $56000 then there will be 2.5% increase in energy cost.

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