Figure 16.3Figure 16.3 depicts a market for electricity. S1 is the supply curve without the external costs. S2 is the supply curve with the $T tax. Assume electricity production incurs external costs. If the government imposes a pollution tax, the price of a mega-watt of electricity will increase by:

Increased specialization in the computer industry is evidenced by

(a) the types of government policies implemented to aid the computer industry. (b) the growth of the software industry. (c) the growth of the manufacturing industry. (d) the growth of agriculture.

Rent seeking reduces our economy's overall efficiency by

a. getting government to adopt legislation that actually reduces production b. disseminating market information c. lowering taxes d. getting voters more interested in politics e. reducing equity