7. Common resources versus private goodsThe fish in the private brook are consideredandand the fish in the lake are an example ofareOutdoors season is underway in Maine, and Taylor and herchildhood friends are planning a weekend fishing trip. Theyhave the choice between fishing the lake near town whereanyone is allowed to fish without a permit, or they coulddrive a short distance to a brook located on a family friend'sproperty in the woods. Assume throughout the problem thatall fish caught in either body of water are free for thosefishing to keep.ofIFishing in the lake will likely lead toandPRIVATEPROPERTYwhereas the fish in the lakeIn other words, the fish in the private brook are an examplebecause of which of the following reasons?All fishermen will choose to fish in the brook believing that there are more fish there.Nobody will enjoy fishing because of the lack of private contributions to the maintenance of the lake.All fishermen will choose to fish in the lake because of the limited access to the brook.Anyone can fish in the lake, and one person's fishing activity decreases the ability of someone else to fish with success.

INTRODUCTION:Taylor and her peers prepare for a weekend fishing expedition in Maine’s scenic natural…

7. Common resources versus private goods Outdoors season is underway in Maine, and Taylor and her childhood friends are planning a weekend fishing trip. They have the choice between fishing the lake near town where anyone is allowed to fish without a permit, or they could drive a short distance to a brook located on a family friend's property in the woods. Assume throughout the problem that all fish caught in either body of water are free for those fishing to keep. The fish in the private brook are considered and and the fish in the lake are an example of are of Fishing in the lake will likely lead to and PRIVATE PROPERTY whereas the fish in the lake . In other words, the fish in the private brook are an example because of which of the following reasons? O All fishermen will choose to fish in the brook believing that there are more fish there. O Nobody will enjoy fishing because of the lack of private contributions to the maintenance of the lake. O All fishermen will choose to fish in the lake because of the limited access to the brook. Anyone can fish in the lake, and one person's fishing activity decreases the ability of someone else to fish with success.

7. Common resources versus private goods Outdoors season is underway in Maine, and Taylor and her childhood friends are planning a weekend fishing trip. They have the choice between fishing the lake near town where anyone is allowed to fish without a permit, or they could drive a short distance to a brook located on a family friend's property in the woods. Assume throughout the problem that all fish caught in either body of water are free for those fishing to keep. The fish in the private brook are considered and and the fish in the lake are an example of are of Fishing in the lake will likely lead to and PRIVATE PROPERTY whereas the fish in the lake . In other words, the fish in the private brook are an example because of which of the following reasons? O All fishermen will choose to fish in the brook believing that there are more fish there. O Nobody will enjoy fishing because of the lack of private contributions to the maintenance of the lake. O All fishermen will choose to fish in the lake because of the limited access to the brook. Anyone can fish in the lake, and one person's fishing activity decreases the ability of someone else to fish with success.

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 10SCQ: Suppose a city releases 16 million gallons of raw sewage into a nearby lake. Table 12.8 shows the...

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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 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?
The rows in Table 12.7 show three market-oriented tools for reducing pollution. The columns of the table show three complaints about command-and-control regulation. Fill in the table by stating briefly how each market-oriented tool addresses each of the three concerns.
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?
Assume that the marginal private costs of a film producing fuel-efficient can; is greater than the marginal social costs. Assume that the marginal private benefits of a firm producing fuel efficient cars are the same as the marginal social benefits. Discuss one wags.r that the government cans ï¬‚y to increase production and sales of fuel efficient cars to the socially desirable amount. Hint: the government is flying to affect production through costs, net benefits.
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?
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?
. Both Wisconsin and Illinois border Lake Michigan. The lake is becoming polluted and both states are deciding whether or not to clean it. If Wisconsin decides to clean the lake it will cost 1200 and generate social benefits of 1500 – however, Wisconsin will receive only 1100 of those social benefits while neighbor Illinois will receive the other 400. If Illinois cleans the lake, it will cost them 700 and generate social benefits of 900 – however, Illinois will receive only 600 of those benefits, Wisconsin will receive the remaining 300. If a state does not clean the lake, it experiences a cost of $0. If both states clean the lake, the payoffs will be A. Wisconsin gains 100, Illinois gains 200B. Wisconsin gains 200, Illinois gains 300C. Wisconsin gains 200, Illinois loses 100D. Wisconsin gains 100, Illinois loses 100
on 7 When externalities exist, buyers and sellers red Select one: d out of a. neglect the external effects of their actions and the market equilibrium is efficient b. do not neglect the external effects of their actions and the market equilibrium is efficient on c. neglect the external effects of their actions and the market equilibrium is not efficient O d. do not neglect the external effects of their actions and the market equilibrium is not efficient on 8 A positive consumption externality will cause a market to red Select one: d out of a. produce less than is socially desirable O b. produce more than is socially desirable on c. produce more than is market optimal O d. produce less than is market optimal on 9 If only a few people are affected by an externality red Select one: d out of a. then it is likely that Pigovian taxes will provide the most efficient solution to the externality O b. then it is likely that command and control regulation will provide the most efficient solution…
Four roommates are planning to spend the weekendin their dorm room watching old movies, and theyare debating how many to watch. Here is theirwillingness to pay for each film:Dwayne Javier Salman ChrisFirst film $7 $5 $3 $2Second film 6 4 2 1Third film 5 3 1 0Fourth film 4 2 0 0Fifth film 3 1 0 0a. Within the dorm room, is the showing of a moviea public good? Why or why not?b. If it costs $8 to stream a movie, how many moviesshould the roommates stream to maximize totalsurplus?c. If they choose the optimal number from part (b)and then split the cost of streaming the moviesequally, how much surplus does each personobtain from watching the movies?d. Is there any way to split the cost to ensure thateveryone benefits? What practical problems doesthis solution raise?e. Suppose they agree in advance to choose theefficient number and to split the cost of the moviesequally. When Dwayne is asked his willingness topay, will he have an incentive to tell the truth? Ifso, why? If not, what will he…
22. Both Wisconsin and Illinois border Lake Michigan. The lake is becoming polluted and both states are deciding whether or not to clean it. If Wisconsin decides to clean the fake it will cost 1200 and generate social benefits of 1500 however, Wisconsin will receive only 1100 of those social benefits while neighbor Illinois will receive the other 400. If Illinois cleans the lake, it will cost them 700 and generate social benefits of 900 â€" however, Illinois will receive only 600 of those benefits, Wisconsin will receive the remaining 300. If a state does not clean the lake, it experiences a cost of $0. If Wisconsin does not clean the lake and Michigan does then the payoffs will be
urco Use the chart below to answer the following question. The Socially Optimal Quantity of Pollution Select one: O a. $83 O b. $250 O c. $500 O d. $167 Marginal social cost, marginal social benefit $500 250 167 0 MSC MSB 83 125 Quantity of pollution The chart above shows the marginal social cost (MSC) and marginal social benefit (MSB) of pollution. Using the information provided in the figure, we can conclude the optimal Pigouvian tax per unit of pollution is: