List two advantages a command-and-control policy has over a pollution tax policy. (ii) List two advantages a pollution tax policy has over a command-and-control policy.

(a) Explain the difference between a positive externality and a negative externality and why each result in an equilibrium point that is not optimal for society. (b) which externality results in an equilibrium quantity that is higher than the optimal social quantity of a good? (c) how can the impact of the externality in part b be corrected?

Provide examples of environmental problems that can be solved with the Pigovian tax.

Describe the key symmetry between a pollution emissions tax and an emissions trading scheme. Outline some reasons you might wish to choose one approach in favour of the other when dealing with an emissions-reduction problem.

Only typed answer  You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 3Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost is MCInternal = 14Q.   Instruction: Round your answers to the nearest two decimal places.   a. What is the socially efficient level of output?   units     b. Given these costs and market demand, how much output would a competitive industry produce?   units     c. Given these costs and market demand, how much output would a monopolist produce?   units     d. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output.   Instructions: You may select more than one answer. Click the box with a check mark for the correct answers and click twice to empty the box for the wrong answers. You must click to select or deselect each option in order to receive full credit. Pollution taxes…

The government auctions off 500 units of pollution rights. They sell for 50 dollars per unit, raising total revenue of 25,000 dollars. The policy is equivalent to a corrective tax of _____ per unit of pollution 1. 10 dollars 2. 50 dollars 3. 450 dollars 4. 500 dollars

Industrial pollution is often cited as an example of a negative externality, but what about smoking? Most of you grew up in an era when smoking was much less socially acceptable than when your parents and grandparents were young. Both students and instructors used to smoke in the classroom and it was allowed was allowed in many college classrooms as late as the 1970s. Although few, if any, colleges allow smoking in classroom buildings now, many bars and restaurants have smoking sections. (a) would you be willing to pay smokers to not smoke while they are in the same restaurant or (b) would you choose to sit in a restaurant’s smoking section to avoid a longer wait for a table in a nonsmoking section. Discuss the cost of the externality to you and others.

Given the same marginal damage and same marginal abatement cost curve, the socially efficient emission subsidy is the same magnitude (dollars per ton) as the socially efficient emission tax (dollars per ton). True False Next

A market with positive externalities will tend to _____ compared to a market producing the socially optimal output. Select one: a. produce the optimal quantity. b. produce too few c. produce too many  d. randomly produce some quantity

Large taxes on energy companies whose production activities cause environmental damage. How does this negative externality affect the allocation of resources? List three things. Include pigovian taxes and marginal costs.