Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Textbook Question
Chapter 3, Problem 7P
Suppose the total benefit and total cost to society of various levels of pollution reduction are as follows:
Complete column
Use total net benefit in column
Complete columns
Show that the Principle of Optimization at the Margin also implies that the EPA should require
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Suppose the Environmental Protection Agency (EPA) wants to mandate that all methane emissions must be reduced to zero in order to alleviate global warming in the United States.
Which of the following describes why most economists would disagree with this policy?
Reducing methane emissions is desirable, but whatever levels of pollution firms decide to emit privately are already efficient.
Society would not benefit from lower air pollution.
The environment isn’t worth protecting.
The opportunity cost of zero pollution is much higher than its benefit.
In the diagram, the MC curve slopes upward because
Multiple Choice
the less pollution society reduces the higher the utility (benefit) of the next unit of pollution reduction.
the more pollution society reduces the higher the utility (benefit) of the next unit of pollution reduction.
the more pollution society reduces the lower the cost of each additional unit of pollution reduction.
the more pollution society reduces the higher the cost of each additional unit of pollution reduction.
Suppose that a forest contains a
population of elk. Individual hunters
living nearby can decide whether or not
to hunt the elk on a given day. The
variable cost of hunting is $30 per day
and elk meat sells for $1 a pound.
Based on the information in the table,
answer the following questions.
a) What is the efficient number of
hunters?
b) How many would hunt if there were
no restrictions placed on hunting?
# of hunters
0
1
2
3
4
5
6
7
8
Total
0
40
114
144
170
180
160
Elk meat (pounds/day)
Average
40
40
36
34
25
20
Marginal
40
34
26
10
-5
-15
Chapter 3 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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