ECON MICRO
5th Edition
ISBN: 9781337000536
Author: William A. McEachern
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 17, Problem 2.6P
(External Costs with Variable Technology) Think of an industry that pollutes the water and has access to variable technology for reducing that pollution. Graphically illustrate and explain the impact of each of the following, other things constant, on the optimal level of water quality:
a. New evidence is discovered about a greater risk of cancer from water pollution.
b. The cost of pollution-control equipment increases.
c. A technological improvement reduces the cost of pollution control.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
(Table: City Sanitation in Winnetka) Use Table: City Sanitation in Winnetka. Suppose that the marginal cost of each street
cleaning is $6. How many street cleanings will there be?
Table: City Sanitation in Winnetka
Number of Street
Cleanings
10
1
2
3
14
QUESTION 29
5
05
03
2
Edwin's Total Benefit Geraldine's Total
Benefit
$0
10
18
24
28
30
$0
18
15
21
26
30
Question 26
Consider two ways to reduce pollution--establishment of taxes on the pollution or the sale of permits to polluters. Which of the following best describes the outcome?
a
Both methods can result in the same reduction of pollution, but the permits may achieve that goal with lower administrative costs.
b
Both methods can result in the same reduction of pollution, but the permits may achieve that goal with higher administrative costs.
c
The permits will allow more pollution, but both methods will have the same administrative costs.
d
Both methods can result in the same reduction of pollution and the same adminstrative costs.
What are the two characteristics of a public good? (Choose two)
A.
External Cost
B.
Non-excludable
C.
External Benefit
D.
Non-rivalous
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- How can high-income countries benefit from covering much of the cost of reducing pollution created by low-income countries?arrow_forward5. Productivity declines from environmental regulation a) might occur if firms divert capital from spending on new plant and equipment to comply with regulations. b) have been ruled out by economic studies. c) for well over half of the productivity declines of the 1970s. d) might occur if firms invest in new capital sooner than they otherwise would to comply with regulations. e) have cost large numbers of jobs in manufacturing. 6. Consider the diagram, what is the efficient level of pollution cleanup? Total Benefits of $100 Cleanup $75 $50 Total Costs of $25 Cleanup $0 2. Polution Cleanup (tona)arrow_forward(Table: City Sanitation in Winnetka) Use Table: City Sanitation in Winnetka. Suppose that the marginal cost of each street cleaning is $6. How many street cleanings will there be? Table: City Sanitation in Winnetka Number of Street Cleanings 0 1 2 2 03 04 O 5 Edwin's Total Benefit $0 10 18 24 28 30 Geraldine's Total Benefit $0 8 15 21 26 30arrow_forward
- (Figure: Efficiency and Pollution in the Market for Vehicle Emissions) Use Figure: Efficiency and Pollution in the Market for Vehicle Emissions. Assume that firms are the only beneficiaries of pollution and that costs are borne solely by others in the society. The socially optimal quantity of pollution is ____ tons.arrow_forward(Figure: The Quantity of Pollution in Coal Production) Use Figure: The Quantity of Pollution in Coal Production. The amount of a Pigouvian tax required to bring the market to the socially optimal level of pollution emissions is: MSB, MSC 200 150 100 50 100. 50. 150. 0. 0 50 100 MSC MSB 150 200 Quantity of pollution emisions (tons)arrow_forwardWater rescue situation Determine what should be done first and last as well as the available resources in the scenarios. 1. You were on the schools swimming pool to practice your butterfly stroke for an upcoming competition and are the only one in the pool area when you noticed someone floating in the pool's 8ft area. When you checked what it was, you were shocked to find a person floating and unresponsive to your calls.arrow_forward
- How does the plastic pollute the environment in Bangladesh during the year 2018-2022. Detail explanation in 1500 words with all the data.arrow_forwardSuppose the marginal cost (MC) and marginal benefit (MB) of reducing nitrogen oxide air pollution are illustrated in the figure. Suppose initially 3 million tons of nitrogen oxides are being reduced. What is the net benefit to society of increasing the elimination of nitrogen oxide air pollution to 6 million tons? The net benefit is $ million. (Enter your response rounded to one decimal place.) Cost or benefit ($ per ton) 500- 450 400- 350- 300- 250- 200- 150- 100- 50- 0- 0 1 MC 2 3 4 5 6 7 8 Reduction (millions of tons per year) MB 9 10arrow_forward11 When performing a benefit cost analysis of different options to provide clean water to a community, the option that should be chosen is the option that maximizes the benefit to cost ratio. True or False?arrow_forward
- 4. The figure below shows the marginal damage (MD) and the marginal abatement cost (MAC) curve facing an industry that discharges a pollutant into the environment. (4 pts) Optimal Level of Pollution $ MD-MB 375 Total Emissions 600 1000 a. If environmental regulations do not restrict pollution by this industry, how many tons per month would be discharged? What is the total damage caused by pollution at this level of emissions? What are total abatement costs per month? What is the total social cost of pollution in this industry in the absence of government restrictions on pollution? b. If environmental regulators banned all pollution, what is the resulting total abatement cost for the industry per month? What is the total social cost for zero pollution in the industry per month? C. Using the figure above, explain why zero pollution in the industry not optimal from society's point of view? d. What is the socially optimal level of emissions for the industry per month? What would be the…arrow_forward(Figure: Pollution and Efficiency) Use Figure: Pollution and Efficiency. In this market, whose sulfur emissions are a result of production, an efficient solution is one in which: Figure: Pollution and Efficiency Price per unit $25 and marginal cost 20 15 10 5 0 B 10 C O MSC MSB. OMSC-MSB. O MSB MSC. O total cost total benefit. E. 20 D Marginal social cost Marginal social benefit 30 40 60 Emissions (per period) unts of pollution from a coal mine. The effarrow_forward3. A local drama company proposes a new neighbourhood theatre in Vancouver. Before approving the building permit, the city planner completes a study of the theatre's impact on the surrounding community. a. One finding of the study is that theatres attract traffic, which adversely affects the community. The city planner estimates that the cost to the community from the extra traffic is $5 per ticket. What kind of an externality is this? Why? (2 marks) b. Graph the market for theatre tickets, labelling the demand curve, the social- value curve, the supply curve, the social-cost curve, the market equilibrium level of output, and the efficient level of output. Also show the per-unit amount of the externality. (4 marks) c. On further review, the city planner uncovers a second externality. Rehearsals for the plays tend to run until late at night, with actors, stagehands, and other theatre members coming and going at various hours. The planner has found that the increased foot traffic…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
The CASH FLOW STATEMENT for BEGINNERS; Author: Accounting Stuff;https://www.youtube.com/watch?v=DiVPAjgmnj0;License: Standard Youtube License