Scenario: Suppose the government decides to levy a tax on the emission of greenhouse gases. The tax on the emission of greenhouse gases has been estimated to provide a future benefit of 1,000 utils, while the current cost of the tax imposed is 700 utils.
-Refer to the scenario above.People will earn a net benefit of ________ if the discount weight of the future benefit is $ \frac{1}{10} $ .

Question

Quizplus · Accepted Answer

The future benefit is 1,000 utils, but with a discount weight of $ \frac{1}{10} $, it is valued at 100 utils. The current cost is 700 utils, so the net benefit is 100 - 700 = ‒600 utils.

Scenario: Suppose the Government Decides to Levy a Tax on the Emission