e. Your roommate is a smoker, but you are a nonsmoker.

2. Identify whether the market supply curve will shift right or left or will stay the same for the following:

a. Firms in an industry are required to pay a fine for their carbon dioxide emissions.

b. Companies are sued for polluting the water in a river.

c. Power plants in a specific city are not required to address the impact of their air quality emissions.

d. Companies that use fracking to remove oil and gas from rock are required to clean up the damage.

3. For each of your answers to Exercise 12.2, will equilibrium price rise or fall or stay the same?

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12 • Self-Check Questions 299

4. Table 12.5 provides the supply and demand conditions for a manufacturing firm. The third column

represents a supply curve without accounting for the social cost of pollution. The fourth column

represents the supply curve when the firm is required to account for the social cost of pollution. Identify
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