Question

You did not receive full credit for this question in a previous attempt Many municipalities are concerned about the environmental impact of plastic bags, which often end up as litter, clogging drains and hanging from tree branches. A town is considering whether to impose a tax on plastic bags to be collected at the store, or a per person quota. Cindy and Carl are two average citizens who both use plastic bags when they go grocery shopping. The figure below shows the net marginal benefit they gain from each bag they use. (A) Quota (B) Tax Net marginal benefit ($) Net marginal benefit ($) Quota Cindy Cindy Carl to 5 0 15 20 25 30 35 40 45 50 55 60 T o is 20 25 30 35 do As soos oo Quantity of plastic bags Quantity of plastic bags
There is one mistake, but i don't know which one is

This is a microeconomics question.

Answer 1

All the answers are correct except answer for c.

Answer should be C. A plastic bag tax because it achieves the same outcome in terms of number of bags but does more efficiently.

Because total number of bags are same in both cases but if we calculate total benefits by adding marginal benefits of both candy and carl carl is approximately 42 in case of Quota and 47 in case of Tax. So total benefits are more in case of tax and in addition there is also revenue for government.

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