Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 12, Problem 10SCQ
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.
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Suppose a city releases 16 million gallons of raw sewage into a nearby lake. Table 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.). a. Using the information in Table, 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. b. What is the optimal level of sewage for this city? c. Why not just pass a law that firms can emit zero sewage? After all, the total benefits of zero emissions exceed the total costs.
Draw a graph with pollution abatement on the horizontal axis (assume a firm can remove up to 100 tons
of pollution) and dollars ($) on the vertical axis. Draw one firm's marginal abatement cost curve (MC).
Say a pollution tax is imposed on the firm. a. What are the costs the firm would incur if they chose to not
reduce pollution at all? b. Is there a different level of pollution abatement the firm could choose that
would result in lower costs? c. Label that level of abatement A* on your graph and shade in the area that
represents the cost-savings as compared to when they polluted 100 tons (did no abatement)
Chapter 12 Solutions
Principles of Economics 2e
Ch. 12 - Identify the following situations as an example of...Ch. 12 - Identify whether the market supply curve will...Ch. 12 - For each of your answers to Exercise 12.2, will...Ch. 12 - Table 12.5 provides the supply and demand...Ch. 12 - Consider two approaches to reducing emissions of...Ch. 12 - Classify the following pollution-control policies...Ch. 12 - An emissions tax on a quantity of emissions from a...Ch. 12 - Four films called Elm, Maple, Oak, and (Shelly,...Ch. 12 - The rows in Table 12.7 show three market-oriented...Ch. 12 - Suppose a city releases 16 million gallons of raw...
Ch. 12 - The state of Colorado requires oil and gas...Ch. 12 - Consider the case of global environmental problems...Ch. 12 - A country called Sherwood is very heavily covered...Ch. 12 - What is an externality?Ch. 12 - Give an example of a positive externality and an...Ch. 12 - What is the difference between private costs and...Ch. 12 - In a market without environmental regulations,...Ch. 12 - What is command-and-control environmental...Ch. 12 - What are the three problems that economists have...Ch. 12 - What is a pollution charge and what incentive does...Ch. 12 - What is a marketable permit and what incentive...Ch. 12 - What are better-defined property rights and what...Ch. 12 - As the extent of environmental protection expands,...Ch. 12 - As the extent of environmental protection expands,...Ch. 12 - What are the economic tradeoffs between low-income...Ch. 12 - What arguments d0 low-income countries make in...Ch. 12 - In the tradeoff between economic output and...Ch. 12 - What does a point inside the production...Ch. 12 - Suppose you want to put a dollar value on the...Ch. 12 - Would environmentalists favor command-and-control...Ch. 12 - Consider two ways of protecting elephants from...Ch. 12 - Will a system of marketable permits work with...Ch. 12 - Is zero pollution possible under a marketable...Ch. 12 - Is zero pollution an optimal goal? Way or why not?Ch. 12 - From an economic perspective, is it sound policy...Ch. 12 - Recycling is a relatively inexpensive solution to...Ch. 12 - Can extreme levels of pollution hurt the economic...Ch. 12 - How can high-income countries benefit from...Ch. 12 - Technological innovations shift the production...Ch. 12 - Show the market for cigarettes in equilibrium,...Ch. 12 - Refer to Table 12.2. The externality created by...Ch. 12 - Table 12.12, shows the supply and demand...Ch. 12 - A city currently emits 15 million gallons (MG) of...Ch. 12 - In the Land of Purity, there is only one form of...
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