a. Suppose that the carbon sequestration that results from planting a tree is worth $4. Graph the social cost curve that accounts for the positive externality of trees. Instructions: Use the tool provided (MCsocial) to draw the social cost curve and plot only the two endpoints across the range of output 0-100. b. Ignoring the positive externality. [ c. The socially optimal quantity of trees is trees trees will be planted. d. Graph the deadweight loss that occurs when suppliers are unable to capture the $4 external benefit they provide from planting trees. Instructions: Use the tool provided (DWL) to draw the deadweight loss. The deadweight loss to society when suppliers are unable to capture the $4 external benefit they provide from planting trees is

a. Suppose that the carbon sequestration that results from planting a tree is worth $4. Graph the social cost curve that accounts for the positive externality of trees. Instructions: Use the tool provided (MCsocial) to draw the social cost curve and plot only the two endpoints across the range of output 0-100. b. Ignoring the positive externality. [ c. The socially optimal quantity of trees is trees trees will be planted. d. Graph the deadweight loss that occurs when suppliers are unable to capture the $4 external benefit they provide from planting trees. Instructions: Use the tool provided (DWL) to draw the deadweight loss. The deadweight loss to society when suppliers are unable to capture the $4 external benefit they provide from planting trees is

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter12: Environmental Protection And Negative Externalities

Section: Chapter Questions

Problem 38CTQ: How can high-income countries benefit from covering much of the cost of reducing pollution created...

See similar textbooks

Similar questions

Suppose a city releases 16 million gallons of raw sewage into a nearby lake. Table 12.8 shows the total costs of cleaning up the sewage to different levels, together with the total benefits of doing so. (Benefits include environmental, recreational, health, and industrial benefits.) Using the information in Table 12.8, calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. See Production, Costs and Industry Structure if you need a refresher on how to calculate marginal costs. What is the optimal level of sewage for this city? Why not just pass a law that films can emit zero sewage? After all, the total benefits of zero emissions exceed the total costs.
How can high-income countries benefit from covering much of the cost of reducing pollution created by low-income countries?
What arguments d0 low-income countries make in international discussions of global environmental clean-up?
Can extreme levels of pollution hurt the economic development of a high-income country? Why or why not?
Consider two approaches to reducing emissions of CO2 into the environment from manufacturing industries in the United States. In the first approach, the U.S. government makes it a policy to use only predetermined technologies. In the second approach, the U.S. government determines which technologies are cleaner and subsidizes their use. Of the two approaches, which is the command-and-control policy?
What is the difference between private costs and social costs?
What is a pollution charge and what incentive does it provide for a firm to take external costs into account?
What is the free rider problem?
A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals to clear some of Sherwoods forest and grow com, but obtaining this additional economic output will have an environmental cost from reducing the number of trees. Table 12.11 shows possible combinations of economic output and environmental protection. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the number of trees, and the quantity of economic output, measured in corn, on the vertical axis. Which choices display productive efficiency? How can you tell? Which choices show allocative efficiency? How can you tell? In the choice between T and R, decide which one is better. Why? In the choice between T and S, can you say which one is better, and why? If you had to guess, which choice would you think is more likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice Q or S? Why?
Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once we accounted for both the private and additional external costs, the market price increased by only 50. If the external costs were 100 why did the price only increase by 50 when we accounted for all costs?
Computer models of global climate changecaused by increasing carbon dioxide in the atmosphere predictnot only higher overall temperatures, but also more intense andfrequent heat waves. During the devastating European heatwave in the summer of 2003, between 35,000 and 52,000“excess deaths” occurred. Before taking specific actions toreduce carbon dioxide emissions, economists and politicians tryto estimate the costs. Should excess deaths be included as acost of inaction? If so, what value should we place on a life?
Econ Return to Activity Score Mentor Mega Beans Market Booming Berries Booming Berries Materials Mark, if the external marginal cost from Booming Berries is $20 per thousand pounds, what is the socially efficient price per pound? 130 Booming Berrles 120 Clare 110 100 $70 90 80 70 Mark 60 That is correct! 50 40 30 Econ 20 Mentor 10 Mark, if the external marginal cost from Booming Berries is $20 per thousand pounds, what is the socially efficient quantity (in thousands)? 10 20 30 40 50 60 70 80 90 100 110 120 Quantity (in thousands) Clare Enter a response then click Submit below (in thousands) Submit MacBook Air F12 FI1 F9 F10 F8 F7 F6 888 F4 F5 F3 F2 esc F1 * & 24 % 8 @ # 7 3 4 2 T E Q tab Price (per pound)