EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Chapter 16.4, Problem 1MQ
To determine
Three methods for attaining R* superior to a regulatory strategies.
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The primary source of air pollution in the small town of Smokey, Nevada is a nearby steel mill. The local environmental agency has decided that the mill needs to reduce its emissions because the town's
population is located directly downwind from it. Currently the agency is considering three different approaches to reducing pollution from the mill: a technology standard, an emission standard and an
emission tax.
Why might the owner of the mill prefer an emission standard to a technology standard that would produce the same level of emissions?
a
Because with emission standards the polluter is more flexible in selecting the technology that will minimize her abatement cost
Ob. Because polluters usually try to stick to their existing technology
O C. Because it has been proven to be easier to implement
O d. Because polluters, as all producers are suspicious about new technologies
The figure below shows the marginal benefit (demand) of polluting for two firms: Alpha and Beta. Before the introduction of a
pollution tax, pollution is free, that is, MC = $0 per ton of emissions.
Marginal
Benefit (MB)
to Firm
Tax = $100
0
MB BETA
MBALPHA
25
50
75
100 Emissions
(tons)
The government decides to impose a tax on pollution of $100 per ton of emissions. That is, the per-unit the tax is the marginal
cost of polluting. Which of the follow are true? (Select all that are true.)
a. As a result of the tax, the total emissions will decrease by 50 units
b. The tax was intended to decrease production by 50 units for each firm.
c. As a result of the tax, both firms will decrease emissions by the same amount
d. After the tax is imposed, Firm Beta will emit 50 tons more pollution than Firm Alpha
e. Before the tax is imposed, Firm Beta emitted more pollution than Firm Alpha
f. As a result of the tax, total emissions from the two firms will be cut in half
g. The amount of tax collected…
The following table shows the marginal costs for each of four firms (A, B, C, and D) to eliminate units of pollution from their production processes. For example, for Firm A to eliminate one unit of pollution, it would cost $54, and for Firm A to eliminate a second unit of pollution it would cost an additional $67.
Firm
Unit to be eliminated
A
B
C
D
First unit
54
57
54
62
Second unit
67
68
66
73
Third unit
82
86
82
91
Fourth unit
107
108
107
111
Refer to Table 5. If the government charged a fee of $84 per unit of pollution, how many units of pollution would the firms eliminate altogether?
Chapter 16 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 16.2 - Prob. 1TTACh. 16.2 - Prob. 2TTACh. 16.2 - Prob. 1MQCh. 16.3 - Prob. 1MQCh. 16.3 - Prob. 2MQCh. 16.3 - Prob. 1TTACh. 16.3 - Prob. 2TTACh. 16.4 - Prob. 1MQCh. 16.4 - Prob. 2MQCh. 16.7 - Prob. 1MQ
Ch. 16.7 - Prob. 2MQCh. 16.8 - Prob. 1TTACh. 16.8 - Prob. 2TTACh. 16.8 - Prob. 1.1TTACh. 16.8 - Prob. 2.1TTACh. 16 - Prob. 1RQCh. 16 - Prob. 2RQCh. 16 - Prob. 3RQCh. 16 - Prob. 4RQCh. 16 - Prob. 5RQCh. 16 - Prob. 6RQCh. 16 - Prob. 7RQCh. 16 - Prob. 8RQCh. 16 - Prob. 9RQCh. 16 - Prob. 10RQCh. 16 - Prob. 16.1PCh. 16 - Prob. 16.2PCh. 16 - Prob. 16.3PCh. 16 - Prob. 16.4PCh. 16 - Prob. 16.5PCh. 16 - Prob. 16.6PCh. 16 - Prob. 16.7PCh. 16 - Prob. 16.8PCh. 16 - Prob. 16.9PCh. 16 - Prob. 16.10P
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- Economists sometimes shock noneconomists by stating that they do not favor the complete elimination of pollution. Explain the rationale for this position.arrow_forwardIs zero pollution possible under a marketable permits system? Why or why not?arrow_forwardFrom an economic viewpoint, the optimal amount of pollution a. is zero because all pollution imposes costs on society. b. is that amount firms create when they maximize economic profits by setting their marginal private costs equal to market price. c. is that amount where the marginal social costs of producing a good precisely equals the price of the good. d. Both answers b. and c. are correct.arrow_forward
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