Social Cost Supply 3.00 2.80 2.07 1.50 Demand 24 30 38 50 QUANTITY (Units oftobacco) Refer to Figure 10-1. This graph represents the tobacco industry. The industry creates O a. positive externalities. O b.no equilibrium Lsthe market. C. negative externalities. d. no externalities. PRICE (Dollars per unit)

Social Cost Supply 3.00 2.80 2.07 1.50 Demand 24 30 38 50 QUANTITY (Units oftobacco) Refer to Figure 10-1. This graph represents the tobacco industry. The industry creates O a. positive externalities. O b.no equilibrium Lsthe market. C. negative externalities. d. no externalities. PRICE (Dollars per unit)

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 41P: Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once...

See similar textbooks

Similar questions

cap-and-trade and windfall profitsA city called Seoul is suffering from high concentrations of mercury in the air, caused by burningcoal in power plants. There are two of these plants close to the city. The city’s mayor wants touse cap-and-trade to reduce emissions to a reportedly “safe” level of 60 tons. The two firms havethe following marginal benefits of emissions: MB1 = 100 – 2e1, MB2 = 25 – 0.5e2.a. How much mercury will each firm emit? What allowance price will prevail in themarket?Firm 2 hires a smart lobbyist who convinces the government that its profits are relatively low andthat it therefore deserves a generous allowance allocation. The government agrees and allocatesa1 = 20 allowances to firm 1 (for free) and a2 = 40 allowances to firm 2 (for free).b. What are the firms’ profits? Do any of the firms earn windfall profits? [Hint: compareprofits with and without regulation.] Windfall profits have been sharply criticized by consumer advocacy groups and politicians.c. What can…
16. A pharmaceutical company develops a vaccine against malaria, a disease that kills large numbers of people worldwide. This vaccine market presents Opositive externalities Onegative externalities Opublic goods Osocial cost and as a result Othe private demand for vaccine is greater than the social demand Othe social demand for vaccines is greater than the private demand Othe market will result in an over production of vaccines Othe price of the vaccine will be too low to generate profitfor the firm
Marginal Benefit (MB) MBBETA to Firm MBALPHA Tax = $100 25 50 75 100 Emissions (tons) Figure 16.5 Figure 16.5 shows the marginal benefits of emitting pollution for the only two chemical companies in an industry, Alpha Chemicals and Beta Chemicals. Before any tax on pollution emissions is imposed, each company views pollution as being free. Refer to Figure 16.5. The government decides to impose a tax on pollution of $100 per ton of emissions. Which of the follow are true? (Select all that are true) O a. As a result of the tax, the total emissions will decrease by 50 units O b. As a result of the tax, both firms will decrease emissions by the same amount O c. As a result of the tax, Alpha will cut more emissions than Beta O d. Before the tax, Beta produced more emissions than Alpha O e. The amount of tax collected is $2500 O f. After the tax, Beta will produce 50 tons more than Alpha Og. The tax was intended to decrease production by 50 units for each firm. O h. As a result of the tax,…
A pharmaceutical company develops a vaccine against malaria, a disease that kills large numbers of people worldwide. This vaccine market presents Opositive externalities Onegative externalities Opublic goods Osocial cost and as a result Othe private demand for vaccine is greater than the social demand Othe social demand for vaccines is greater than the private demand Othe market will result in an over production of vaccines Othe price of the vaccine will be too low to generate profitfor the firm ZER F11 F12 F6 F7 F8 F9 F10 prt s
ASAP plz Why don't people/stores make different decisions? Cost is a factor: a case of foam take-out containers costs $25, compared with $58 for paper and recyclable-plastics. How does this affect the firm's profit? Are consumers willing to pay more? Negative externality Consider the demand and supply given above. Suppose there is an external cost given by MEC=5Q. Find social equilibrium price and quantity. Draw a graph and label both private and social equilibrium.
QUESTION 22 Figure: Three Firms That Pollute Marginal benefit of Individual polluter $1,000 0004 Fim A 800 700 6004 500 400 300 200 100 0 Firm B C. firm C D. firm A Fm C 100 200 300 400 500 600 700 800 900 1,000 Quantity of mercury (tons) Reference Ref 164 (Figure: Three Firms that Pollute) Look at the figure Three Firms That Pollute. If each company is allowed to emit only 300 tons of pollution per day, which company will be most adversely affected? A. They are equally affected. B. firm B
This graph represents the tobacco industry. IPrice 16 14 Social Cost 12 10 Private Cost 8 6 4 Demand 200 500 650 Quantity a) Without any government intervention, what is the market determined price and quantity? b) What is the price of the externality? c) What is the socially optimal price and quantity? d) What should the government do (impose a tax or provide a subsidy) to internalize this externality? What is the amount of the the corrective tax/subsidy needed to be to move the outcome from the market equilibrium to the socially-optimal outcome?
How market equilibrium is found with Pollution Abatement Subsidy? Also draw graph and interpret it.
Price Price/costs 5 아이 00 g 우승 슭 엉 엉 엉 60 55 50 45 40 35 30 25 20 15 10 0 SE54AF1 60 55 50 40 35 30 25 20 10 5 0 1002003004005006007008009001000100200 Quantity per period B 1 2 3 4 5 6 7 8 9 10 11 12 13 Quantity per period a. What are the market equilibrium price and quantity? Equilibrium price: $ Quantity traded: MC AC b. At equilibrium, what quantity is the firm producing? What is its total profit or loss? Leave no cells blank - be certain to enter "0" wherever required. Quantity: Total profit or loss $
Only typed answer and please don't use chatgpt The inverse demand for leather is given by P = 50-0.5Q. The industry supply of leather is determined by its marginal cost: MC = 0.4Q. Unfortunately, the production of leather causes noxious chemical residue to leach into groundwater supplies. The external marginal cost caused by these residues grows with the amount of output, and is measured as EMC = 0.05Q. 1A. How many leather is produced in the free market if the externality is not corrected. B) What is the free market price of the leather if the externality is not corrected? C) What is the social marginal cost?
A company is considering building a bridge across ariver. The bridge would cost $2 million to build andnothing to maintain. The following table shows thecompany’s anticipated demand over the lifetime ofthe bridge:Price per CrossingNumber of Crossings,in Thousands$8 07 1006 2005 3004 4003 5002 6001 7000 800a. If the company were to build the bridge, whatwould be its profit-maximizing price? Would thatlevel of output be efficient? Why or why not?b. If the company is interested in maximizing profit,should it build the bridge? What would be itsprofit or loss?c. If the government were to build the bridge, whatprice should it charge?d. Should the government build the bridge?Explain.
D. Pollution problem You know the marginal cost of reducing pollution for four factories. Each unit of pollution can be eliminated according to the following marginal costs. A B C D First Unit $65 $15 $30 $10 Second Unit $75 $55 $65 $30 Third Unit $85 $85 $110 $40 Fourth Unit $120 $155 $120 $60 1. The total cost of Firm D eliminating 4 units of pollution 2. Determine the total cost of each firm eliminating one unit of production. 3. The community has decided that the managers of the firms are allowed to produce a total of 4 units of production. Identify the firm(s) that will pollute.