22. Both Wisconsin and Illinois border Lake Michigan. The lake is becoming polluted and both states aredeciding whether or not to clean it. If Wisconsin decides to clean the fake it will cost 1200 and generate socialbenefits of 1500 however, Wisconsin will receive only 1100 of those social benefits while neighbor Illinois willreceive 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 statedoes not clean the lake, it experiences a cost of $0. If Wisconsin does not clean the lake and Michigan does thenthe payoffs will be

*Answer: Cleaning of polluted lake will rise the positive externalities and society will benefit…

Both Wisconsin and Illinois border Lake Michigan. The lake is becoming polluted and b deciding whether or not to clean it. If Wisconsin decides to clean the fake it will cost 1200 and g benefits of 1500 however, Wisconsin will receive only 1100 of those social benefits while neighbe receive the other 400. If Illinois cleans the lake, it will cost them 700 and generate social benefi however, Illinois will receive only 600 of those benefits, Wisconsin will receive the remaining. does not clean the lake, it experiences a cost of $0. If Wisconsin does not clean the lake and Michig the payoffs will be

Both Wisconsin and Illinois border Lake Michigan. The lake is becoming polluted and b deciding whether or not to clean it. If Wisconsin decides to clean the fake it will cost 1200 and g benefits of 1500 however, Wisconsin will receive only 1100 of those social benefits while neighbe receive the other 400. If Illinois cleans the lake, it will cost them 700 and generate social benefi however, Illinois will receive only 600 of those benefits, Wisconsin will receive the remaining. does not clean the lake, it experiences a cost of $0. If Wisconsin does not clean the lake and Michig the payoffs will be

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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In the Land of Purity, there is only one form of pollution, called gunk. Table 12.14 shows possible combinations of economic output and reduction of gunk, depending on what kinds of environmental regulations you choose. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the percentage reduction of gunk, and with the quantity of economic output 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 K and L, can you say which one is better and why? In the choice between K. and N, can you say which one is better, and why? If you had to guess, which choice would you think is move likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice L or M? Why?
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?
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?
From an economic perspective, is it sound policy to pursue a goal of zero pollution? Why or why not?
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?
As the extent of environmental protection expands, would you expect the marginal benefits of environmental protection to rise or fall? Why or why not?
Is zero pollution an optimal goal? Way or why not?
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.
Suppose you want to put a dollar value on the external costs of carbon emissions from a power plant. What information or data would you obtain to measure the external [not social] cost?
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.
Suppose that Sonys R. Is this a private or social benefit?