Now suppose that the government has to intervene in the production of the good (rice) for there is a reason to believe (as community clamors it) that the production is causing pollution in the community. With the intervention, the local government decided to impose a tax (Pigouvian tax) on the polluters (a tax per unit of the good produced). Use the figure below to answer the following: A.    What is the value of the tax?  B.    Calculate Pigouvian tax revenue as a result of this tax levied on producers

This is an end-of-chapter problem that I'm struggling with! thanks!

What happens in the market for a good that pollutes the air when it is manufactured if government decides to tax its production? Will this reduce the amount of air pollution?

B. Let’s consider the market for flour in a different town. Assume that it is efficient (i.e. that there are not external costs to producing flour, and no external benefits from consuming it). Price ($/lb) Quantity Supplied (thousands of lbs per day) Quantity Demanded (thousands of lbs per day) 1.5 8 14 2 9 13 2.5 10 12 3 11 11 3.5 12 10 4 13 9 What is the price and quantity of flour sold without government intervention. Graph this equilibrium. XXXX   2. Suppose that, alarmed by the inability of many poorer consumers to buy flour, the government institutes a $2/lb price ceiling. How much flour will suppliers wish to sell, and how much will buyers demand?  How much flour will actually be sold? Show this outcome on the same graph you drew for question 1. XXXX 3. Describe, in one sentence each, three problems that this policy might create? Please do not simply copy down phrases from the textbook, but instead describe ways that…