1.If a CO2 washing machine can trap CO2 at a cost of $30 per ton, a gasoline tax of roughly per gallon of gasoline would cover the cost of capturing the CO2 it generates. (Related to Application 2...

1.If a CO2 washing machine can trap CO2 at a cost of $30 per ton, a gasoline tax of roughly

per gallon of gasoline would cover the cost of capturing the CO2 it generates. (Related to Application 2 on page 688.)

2. Arrows up or down: A carbon tax will shift the supply curve for home heating oil
, causing the equilibrium price to

and the equilibrium quantity to


.