Macmillan Learning The accompanying schedule depicts the marginal social cost (MSC) and the marginal social benefit (MSB) associated with pollution emissions. Assume the polluters bear none of the social cost of pollution and all of the benefits. Quantity is measured in tons. Social Cost- Benefit Schedule Q MSB MSC What is the socially optimal amount of pollution? 9 tons 7 tons 8 tons 0 tons What is the size of the tax that would move the market to this socially optimal quantity? What is the size of the tax that would move the market to this socially optimal quantity? $135 per ton $105 per ton $120 per ton $150 per ton 4 180 60 09 5 165 75 75 6 150 90 00 7 135 105 8 120 120 9 105 135 10 90 150 = 11 75 165 12 60 00 180 13 45 195 14 30 210 15 15 225 16 0 240

What should the government set their corrective tax to if they want to eliminate 7 units of pollution?

There are three industrial firms in a town Firm Initial Pollution Level Cost of Reducing Pollution by 1 Unit A 30 units $20 40 units 20 units B с $30 $10 The government wants to reduce pollution to 60 units, so it gives each firm 20 tradable pollution permits. 1. Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation? 2. How much higher would the costs of pollution reduction be if the permits could not be traded?

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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…

4 This is a graph reprinted from Section 12.1 the Economics of Pollution. Please explain the graph with particular attention paid to why there are two supply curves. How can a government use this graph to establish pollution controls?

Why do economists prefer corrective taxes and tradeable permits over command and control policies as a way to protect the environment from pollution? Explain

Explain: “Without a market for pollution rights, dumping pollutants into the air or water is costless; in the presence of the right to buy and sell pollution rights, dumping pollutants creates an opportunity cost for the polluter.” What is the significance of this opportunity cost to the search for better technology to reduce pollution?

ЕOC 11.04 Consider two car factories, one run by Ford and the other run by Honda, that both create pollution. The government wants to reduce how much these two factories pollute by 40 tons, so only allow factories to pollute if they have a permit. Each factory is given 20 pollution permits. A business can use a permit to emit one ton of pollution or they can sell it to another business (and lose the ability to pollute). To lower pollution it costs Ford $200 per ton of pollutant removed and it costs Honda $100 per ton removed. After Ford and Honda have met to trade their permits with each other, what we expect to happen? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. Honda emits 20 tons of pollutants and Ford emits 20 tons of pollutants. a Honda no longer pollutes and Ford does not lower how much it produces. Honda increases its pollution and Ford lowers its pollution. Ford no longer pollutes and Honda does not lower how much it…