A carbon tax placed on coal would
A) raise the costs of goods produced using coal, raising their price, and thus decreasing the quantity demanded of these goods.
B) not affect emissions of greenhouse gases.
C) shift the demand curve for coal to the right.
D) make coal a more attractive form of energy.

Question

Quizplus · Accepted Answer

A carbon tax placed on coal would increase the cost of production for goods made using coal, leading to an increase in their prices. As a result, the demand for such goods would decrease, causing a movement along the demand curve to the left, resulting in a decrease in the quantity demanded of coal. This, in turn, would lead to a reduction in greenhouse gas emissions associated with burning coal. Therefore, A is the correct answer. B, C, and D are incorrect as they do not align with the effects of a carbon tax on coal as explained above.

A Carbon Tax Placed on Coal Would