Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
expand_more
expand_more
format_list_bulleted
Question
Chapter 14, Problem 4SQP
To determine
Lower average tip from a larger group.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Analyze the social costs of alcohol consumption
A system of tradable emissions permits ("cap and trade") ensures that:
those who can reduce pollution at least cost will do so
pollution will be at the level where marginal social benefit equals zero
pollution will be at the level where marginal social cost equals zero
there will be no pollution
The table below shows the demand for pollution permits to emit hydrocarbons in a particular industrial park. Each permit allows the owner to
release one tonne of pollutants into the atmosphere.
Price per
Pollution Permit
Quantity of Permits
$4,500
100
4,000
200
3,500
300
3,000
400
2,500
500
2,000
600
1,500
700
were charged, how many tonnes of pollutants would be discharged into the atmosphere, assuming a straight-line
a. If fee for a pollution perm
demand curve?
Quantity:
tonnes
b. Suppose government were to set a fee of $2,500 per pollution permit. How many tonnes of pollutants would now be dumped? What is the total
revenue received by government?
Quantity:
tonnes
Total revenue: $
c. Suppose that a new technology allows for a significant reduction in hydrocarbons at a relatively low cost so that the demand for pollution permits
in the industrial park drops by 200 tonnes. Assuming that government holds the permit fee at $2,500, how many tonnes of pollutants would now be
dumped? What…
Chapter 14 Solutions
Micro Economics For Today
Ch. 14.2 - Prob. 1.1GECh. 14.2 - Prob. 1.2GECh. 14.2 - Prob. 1.3GECh. 14.2 - Prob. 2.1GECh. 14.2 - Prob. 2.2GECh. 14.2 - Prob. 2.3GECh. 14.2 - Prob. 2.4GECh. 14 - Prob. 1SQPCh. 14 - Prob. 2SQPCh. 14 - Prob. 3SQP
Ch. 14 - Prob. 4SQPCh. 14 - Prob. 5SQPCh. 14 - Prob. 6SQPCh. 14 - Prob. 7SQPCh. 14 - California once proposed legislation that would...Ch. 14 - Prob. 9SQPCh. 14 - Prob. 10SQPCh. 14 - Prob. 11SQPCh. 14 - Prob. 12SQPCh. 14 - Prob. 13SQPCh. 14 - Prob. 14SQPCh. 14 - Prob. 15SQPCh. 14 - Prob. 16SQPCh. 14 - Prob. 1SQCh. 14 - Prob. 2SQCh. 14 - Prob. 3SQCh. 14 - Prob. 4SQCh. 14 - The perfectly competitive profit-maximizing firm...Ch. 14 - Prob. 6SQCh. 14 - Prob. 7SQCh. 14 - Prob. 8SQCh. 14 - Prob. 9SQCh. 14 - Prob. 10SQCh. 14 - Prob. 11SQCh. 14 - Prob. 12SQCh. 14 - Prob. 13SQCh. 14 - Prob. 14SQCh. 14 - Prob. 15SQCh. 14 - Prob. 16SQCh. 14 - Prob. 17SQCh. 14 - Prob. 18SQCh. 14 - Prob. 19SQCh. 14 - Prob. 20SQ
Knowledge Booster
Similar questions
- How can external effects change supply and demand in electricity generation (Please provide a drawing)arrow_forwardThe market for paper in a particular region in the United States is characterized by the following demand and supply curves: Qp = 155,000 – 2,000P and Qs = 35,000+ 2,000P where Q is the quantity demanded in 100-pound lots, Qs is the quantity supplied 100-pound lots, and P is the price per 100-pound lot. Currently there is no attempt regulate the dumping of effluent into streams and rivers by the paper mills. As a result, dumping widespread. The marginal external cost (MEC) associated with the production of paper is given by the curve MEC = 0.0006Qs. made to monitor or regulate the dumping of effluent. (Enter your responses rounded to two decimal places.) a. Calculate the output and price of paper if it is produced under competitive conditions and no attempt Without regulation, the price. $per 100-pound lot, and the quantity is 100-pound lots.arrow_forwardPrice GF E D 0 A) 0. BA OB) G. OC) D. OD) F. Quantity с S In the graph, line S is the current supply of this product, while line S, is the optimal supply from the society's perspective. If government corrects this externality problem and shifts production to the socially optimal level, then the product price will be equal to Darrow_forward
- A developing country implements pollution laws for the first time. Initially, there are some relatively cheap ways to reduce pollution and results are easily evident. After twenty years, they've found that the more one reduces pollution, the higher the marginal benefit. the lower the marginal benefit. the lower the marginal cost.arrow_forwardThe many identical residents of Whoville love drinking Zlurp. Each resident has the following willingness to pay for the tasty refreshment: First bottle Second bottle Third bottle Fourth bottle Fifth bottle Further bottles $14 $4 The cost of producing Zlurp is $1.50, and the competitive suppliers sell it at this price. (The supply curve is horizontal.) Producing Zlurp creates pollution. Each bottle has an external cost of $1. Taking this additional cost into account, what is total surplus per person? $8 $5 $4.5 3 2arrow_forwardDescribe aspects of environmental economics and ecological economicsarrow_forward
- There are two identified externalities involved with pig farming. What are they?arrow_forwardIn Guadeloupe and Martinique, the use of pesticide chlordecone on banana plantations led to devastation of fishing communities downstream. Which of the following are possible solutions? 1) Force the pesticide users to bear the costs incurred by the fishing communities. 2) Ban the use of the pesticide. 3) Let the banana producers also own the fisheries. 4) Regulate the use of the pesticide.arrow_forwardProvide examples of environmental problems that can be solved with the Pigovian tax.arrow_forward
- Price ($) R H K W M SMC Demand PMC Quantity Refer to the graph above. What areals) represents the government revenue if pollution permits (sold to firms) are implemented to fix the externality? (hint: if there is no government revenue then answer: "zero")arrow_forwardThe graph below shows a market with a certain externality. S denotes the private cost of producers and D denotes the private value of consumers in this market. Without any intervention the total surplus is equal to P H S+ External Cost E S S C 0 (KGO) (KIE) O (KGO) - (IJG) O (KIE) - (JIG) D Qarrow_forwardSee attached environmental economicsarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning