Suppose California adopts environmental rules that permit manufacturers to emit more pollutants into the air, which affects air quality in Nevada and other neighboring states. This is an example of a/an_____________________. a. Intergovernmental transfer b. Coordination problem c. Optimal response d. Positive externality e. Negative externality

Suppose California adopts environmental rules that permit manufacturers to emit more pollutants into the air, which affects air quality in Nevada and other neighboring states. This is an example of a/an_____________________. a. Intergovernmental transfer b. Coordination problem c. Optimal response d. Positive externality e. Negative externality

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Imagine you are working as a climate advisor to the federal government and they want to craft a bill to drastically reduce methane emissions in America. Which of the following policies would you recommend to them as the most effective in reducing methane? a. federal and state funding being directed to the western states for large scale forest management and fire prevention b. incentive programs to reduce meat production and consumption, while additionally subsidizing alternative diet options c. a nationwide waste management program focused on composting organic material to divert waste from landfills d. incentivizing solar panels to allow for affordable renewable energy that is competitive with market pricing for energy]
Explain the concept of externalities; include an example, as well as how the government takes action to correct it.
2. Last year, nearly 200 countries agreed on a plan to limit greenhouse gas emissions, in an effort to limit climate change. One of the challenges in creating such a plan is that climate change is a global phenomenon, depending on total emissions from all countries. Which of the following best describes the benefits of a plan that reduces global warming? a. It's a common pool resource; countries will tend to contribute too much to global warming efforts b. It's a public good; countries will tend to contribute too much to global warming efforts C. It's a common pool resource; countries will tend to contribute too little to global warming efforts d. It's a public good; countries will tend to contribute too little to global warming efforts e. None of the above
Identify the following situations as an example of a negative or a positive externality: a. You are a birder (bird watcher), and your neighbor has put up several birdhouses in the yard as well as planting trees and flowers that attract birds. b. Your neighbor paints his house a hideous color. c. Investments in private education raise your country’s standard of living. d. Trash dumped upstream flows downstream right past your home. e. Your roommate is a smoker, but you are a nonsmoker.
Externalities can be ________ by collective (i.e.) ________ action. a. enhanced // market b. internalized // market c. internalized // government d. externalized // government
Differentiate between a public good and common resources.
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What do you think are the top 2 most significant externalities cost that we face today and what can be done to mitigate their effects?
History offers many examples of small groups of farmers collectively managing shared irrigation systems, yet there are also many examples of inefficient depletion of large-scale groundwater aquifers due to agricultural irrigation. Use the concepts of common property and open access to briefly describe a potential explanation for these two very different phenomena.
A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals to clear some of Sherwood’s forest and grow corn, but obtaining this additional economic output will have an environmental cost from reducing the number of trees. Table shows possible combinations of economic output and environmental protection. a. 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. b. Which choices display productive efficiency? How can you tell? c. Which choices show allocative efficiency? How can you tell? d. In the choice between T and R, decide which one is better. Why? e. In the choice between T and S, can you say which one is better, and why? f. 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…
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Suppose a firm is able to dump toxic chemicals into a river next to its factory, which poisons wildlife and harms the health of nearby residents who have no business with the company. This scenario is characterized by which is an example of an externality, market failure market power; market failure market power; welfare an externality; welfare