In each case, indicate whether the statement as given is true/false/uncertain and explain why. Points will be given for the explanation of your answer only. Write your answers as completely as possible.

1.The problem of social choice is complicated by the wide range of individual perspectives (e.g., biocentrism, anthropocentrism, sustainability, etc.), but the more difficult problem is taking whatever individual preferences exist and coming up with a choice that balances the competing interests in determining what is best for society.

2. If a polluting firm (for example, a steel producer) is also a monopolist in its output market, the appropriate pollution tax should be even higher than the standard Pigouvian tax in order to discourage both the firm’s pollution production and its monopolistic behavior.

3. A firm facing a tax on pollution has a greater incentive for a firm to innovate (i.e., find new, more efficient ways to reduce pollution) than a firm facing a technology standard.