Answered: What are the estimated abatement cost…

What are the estimated abatement cost curves? What would the pollution standard be if they achieved the social optimum? What about an optimal pollution tax?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Can you explain why the following statement is false? The efficient level of a pollution-emitting activity (e.g., production of a good) is that at which the marginal external cost of pollution is equal to zero.
An example of a positive externality is:a) the profit made from the sale of electric vehicles b) the penalty paid by a coal mining company after it is caught illegally dumping toxic waste into a riverc) knowledge spillovers that result when a maker of microchips invests in research and developmentd) the price paid by an electricity company for an emission certificate on the European Trading Scheme, allowing it to emit a specified level of CO2
Which of the following is NOT a possible way of solving an externality problem of electricity production using coal? A. A quota of electricity production using coal exactly equal to the production level in the socially optimal allocation. B. A ban on coal burning, in order to force the use of alternative energy sources. C. Issue trading rights to burn coal for electricity production, and let a market decide the clearing price for those rights. D. A per-unit tax on the electricity price equal to marginal external cost of burning coal at the socially efficient allocation.
The diagram to the right illustrates the market for outdoor concert tickets in a park in the middle of a residential area in a particular town. Ticket prices are measured in dollars (the grid is drawn for $2.50 increments) and ticket quantities are measured in thousands. The locals are not happy about the increased traffic congestion and noise that accompany each concert. Note that supply curve S, represents the marginal private cost of the concerts. What is the cost of the externality $55- $50- $45- per concert ticket? $40- ..... The cost of the externality is $ per concert ticket sold. $35- (Round to the nearest cent as needed.) $30.00 $30+ $25- $20.00 $20- ........ $15- $10- $5- 10 15 $0- 10 15 20 30 Q of Tickets (Thousands) 25 P. .....
Suppose that a local airport is near a residential neighborhood. To land at this airport, an airliner must pay $51. To soundproof the local homes, so residents do not hear airplanes all hours of the day, residents must pay $28. What is the private cost for a plane to land at this airport? What is the external cost of a plane landing at the airport? What is the social cost of a plane landing at the airport? F11 F12 F5 F6 F8 F9 F10 F7 F2 F3 F4 prt s
Suppose the marginal damage cost is estimated to be MD = 0.8E and the marginal abatement cost is estimated to be MAC = 90 - E. Find the following: a) The socially efficient level of emission b) How much emission could be reduced from the uncontrolled level? c) the Total Social Costs d) Draw the graphs and show your calculations.
Describe how government actions can lead to more efficient outcomes when negative and positive externalities are present.
The primary source of air pollution in the small town of Smokey, Nevada is a nearby steel mill. The local environmental agency has decided that the mill needs to reduce its emissions because the town's population is located directly downwind from it. Currently the agency is considering three different approaches to reducing pollution from the mill: a technology standard, an emission standard and an emission tax. Why might the owner of the mill prefer an emission standard to a technology standard that would produce the same level of emissions? a Because with emission standards the polluter is more flexible in selecting the technology that will minimize her abatement cost Ob. Because polluters usually try to stick to their existing technology O C. Because it has been proven to be easier to implement O d. Because polluters, as all producers are suspicious about new technologies
The figure below shows the marginal benefit (demand) of polluting for two firms: Alpha and Beta. Before the introduction of a pollution tax, pollution is free, that is, MC = $0 per ton of emissions. Marginal Benefit (MB) to Firm Tax = $100 0 MB BETA MBALPHA 25 50 75 100 Emissions (tons) The government decides to impose a tax on pollution of $100 per ton of emissions. That is, the per-unit the tax is the marginal cost of polluting. Which of the follow are true? (Select all that are true.) a. As a result of the tax, the total emissions will decrease by 50 units b. The tax was intended to decrease production by 50 units for each firm. c. As a result of the tax, both firms will decrease emissions by the same amount d. After the tax is imposed, Firm Beta will emit 50 tons more pollution than Firm Alpha e. Before the tax is imposed, Firm Beta emitted more pollution than Firm Alpha f. As a result of the tax, total emissions from the two firms will be cut in half g. The amount of tax collected…
QUESTION 16 Consider the following figure Price SMC PMC P. M H. Demand + Quantity Refer to the graph above. What area(s) represent(s) the victim's suffering if pollution permits (given for free to the firms) are implemented to fix the externality?
Consider the market for steel. Suppose that a steel manufacturing plant dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the plant. Producing an additional ton of steel imposes a constant external cost of $165 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for steel. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $165 per ton. 1100 990 Social Cost 880 770 Supply (Private Cost) 660 550 440 330 220 Demand 110 (Private Value) 1 2 4 7 QUANTITY (Tons of steel) PRICE (Dollars per ton of steel)
The demand for cigarettes is given by Figure 1 P = 550 - 0.2Q. Price 650- Cigarettes are manufactured at a constant marginal cost of 100 and sold in a 600- 550 competitive market. 500여 450 What is the quantity of cigarettes sold in equilibrium? Oprivate =U 400여 350- If cigarettes generate a marginal external cost of MEC = 0.20Q, what is the socially optimal level of cigarettes? 300 250- Qsocially optimal= 200여 150 Using Figure 1 on the right that already shows the market demand curve to illustrate the private and social MC curves. Also, point out the private market quantity, the socially optimal quantity, and the social welfare cost. 100 50 D 0- 1) Using curve as 'MC'. line drawing tool, illustrate the private marginal cost curve. Label this 400 800 1200 1600 2000 2400 2800 Output 2) Using the line drawing tool, illustrate the social marginal cost curve. Label this curve as 'MSC'. (Hint: to plot this correctly you may first want to plot the socially optimal point 'B' in step 4 below)…