(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 16 10 5 0 10 O MSC MS8 OMSC MS8. O MSB MSC. O total cost total benefit. Marginal social cost 20 E. A Ma social 40 Emissions (per period)

(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 16 10 5 0 10 O MSC MS8 OMSC MS8. O MSB MSC. O total cost total benefit. Marginal social cost 20 E. A Ma social 40 Emissions (per period)

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 5PA

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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.
A city currently emits 15 million gallons (MG) of raw sewage into a lake that is beside the city. Table 12.13 shows the total costs (TC) in thousands of dollars of cleaning up the sewage to different levels, together with the total benefits (TB) of doing so. Benefits include environmental, recreational, health, and industrial benefits. Using the information in Table 12.13 calculate the marginal costs and marginal benefits of reducing sewage emissions for this City. What is the optimal level of sewage for this city? How can you tell?
TC TB 16 MG Current Current 12 MG 50 800 8 MG 150 1300 4 MG 500 1850 0 MG 1200 2000 A city currently emits 16 million gallons (MG) of raw sewage into a lake that is beside the city. The above table shows the total costs (TC) in thousands of dollars of cleaning up the sewage to different levels, together with the total benefits (TB) of doing so. Benefits include environmental, recreational, health, and industrial benefits. a. Using the table, calculate the marginal cost and marginal benefits of reducing sewage emissions for the city. b. What is the optimal level of sewage for the city? How can you tell?
3. Draw the market for electricity below with the knowledge that the energy market is the greatest global polluter.
How market equilibrium is found with Pollution Abatement Subsidy? Also draw graph and interpret it.
7. Problems and Applications Q7 For any given demand curve for the right to pollute, the government can achieve the same outcome either by setting a price with a corrective tax or by setting a quantity with pollution permits. Suppose there is a sharp improvement in the technology for controlling pollution. Illustrate the effect of this development on the demand for pollution rights. Price of Pollution Quantity of Pollution Demand As a result of the technology change, Demand Suppose the corrective tax policy and the number of pollution permits available do not change in spite of this demand shift. of pollution will change under (?) of pollution will change under pollution permits system, and corrective tax system.
$20 15 10 1,200 1,500 1,800 2,400 Refer to the figure. The figure represents the market for Covid vaccines with external benefits. The external of vaccination is benefit; $5 cost; $10 cost; $15 benefit; $20
2.Is the collection of emissions fees economically efficient in terms of cost effectiveness? How do manufacturers determine the amount of pollution reduction?
There are three industrial firms in the county. -Firm A's initial pollution level is 50 units. Its cost of reducing pollution by 1 unit is $30. -Firm B's initial pollution level is 40 units. Its cost of reducing pollution by 1 unit is $20.-Firm C's initial pollution level is 30 units. Its cost of reducing pollution by 1 unit is $40.The government wants to reduce pollution to 90 units so it gives each firm 30 tradable pollution permits.(i) Who sells permits? (ii) How many do they sell? (iii) Who buys permits? (iv) How many do they buy?
The table below shows the demand for pollution permits to emit hydrocarbons in a particular industrial park. Each permit allows the owner to release one tonne of pollutants into the atmosphere. Price perPollution Permit Quantity of Permits $4,500 75 4,000 150 3,500 225 3,000 300 2,500 375 2,000 450 1,500 525 a. If no fee for a pollution permit were charged, how many tonnes of pollutants would be discharged into the atmosphere, assuming a straight-line demand curve? Quantity: tonnesb. Suppose government were to set a fee of $3,500 per pollution permit. How many tonnes of pollutants would now be dumped? What is the total revenue received by government? Quantity: tonnes Total revenue: $ c. Suppose that a new technology allows for a significant reduction in hydrocarbons at a relatively low cost so that the demand for pollution permits in the industrial park drops by 150 tonnes. Assuming that government holds the permit fee at $3,500, how many tonnes of…
43. A city currently emits 16 million gallons (MG) of raw sewage into a lake that is beside the city. Table 12.13 shows the total costs (TC) in thousands of dollars of cleaning up the sewage to different levels, together with the total benefits (TB) of doing so. Benefits include environmental, recreational, health, and industrial benefits. TC TB 16 MG Current Current 12 MG 50 800 8 MG 150 1300 4 MG 500 1850 O MG 1200 2000 Table 12.13 a. Using the information in Table 12.13 calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. b. What is the optimal level of sewage for this city? How can you tell?
(Figure: The Optimal Quantity of Pollution in the Market for Benzene Waste) Use Figure: The Optimal Quantity of Pollution in the Market for Benzene Waste. The figure shows the marginal social cost (MSC) and marginal social benefit (MSB) for firms that pollute the air with benzene fumes. Using the figure, the optimal Pigouvian tax per unit of pollution is: Marginal social | cost, marginal. social benefit $500 Powere O $500 O $250. O $167. O $83. 250 167 0 MSB 83 125 MSC Quantity of pollution