Economics Today: The Micro View (19th Edition) (Pearson Series in Economics)
19th Edition
ISBN: 9780134479255
Author: Roger LeRoy Miller
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 31, Problem 13P
Take a look at Figure 31-2. Suppose that initially society experiences a degree of air cleanliness that is lower than Q2 What would be true of the marginal benefit in relations to the marginal cost, and why would this fact induce society to increase the degree of air cleanliness toward Q2
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Over the last 10 years the federal government has dramatically increased the number of regulations pertaining to transportation security and the effects of transportation on the environment. After the terrorist attack on the United States on September 11, 2001, the Department of Homeland Security (DHS) was established. Within the DHS is the Trans- portation Security Administration, which is responsible for implementing regulations to protect the safety of passengers using the U.S. airline industry. These regulations require passengers to be screened for illegal items before they enplane, limit the size and nature of items in carry-on luggage, and provide guidelines for more intense scrutiny of ran- domly selected passengers. Critics of these policies complain that these policies delay passengers, increase time through airports, cause delays, and increase costs for the air- lines. Proponents of these policies argue that the safety of air passengers is more impor- tant that these delays…
Suppose the marginal cost of pollution abatement is constant and equal to 10 percent of GDP for each 10 percent increase in pollution
control Given the following data for a $10 trillion economy, answer two questions,
Level of Pollution
Abatement (%)
0 (no pollution control)
10
20
30
40
50
60
70
80
90
100 (zero emissions)
Marginal Benefit
($ trillions)
2.0
1.7
1.3
1.0
08
06
04
03
02
0.1
Instructions: Enter your responses based on the percentage values provided in the table
a. Identify the optimal rate of pollution abatement
Now suppose that the marginal costs of pollution abatement decrease to 6 percent of GDP for each 10 percent increase in pollution
control because of improved pollution control technology and more efficient sources of renewable energy
b. Identify the new optimal rate of pollution abatement
%
Imagine a firm's marginal abatement cost function with existing technologies is: MAC = 30 – 2E. If
the firm adopts new pollution abatement technologies, its marginal abatement cost function will
be: MAC = 15 – E. With a tax on emissions of $6, the benefits of adopting the new technologies
are $_
Answer:
Chapter 31 Solutions
Economics Today: The Micro View (19th Edition) (Pearson Series in Economics)
Ch. 31 - Prob. 31.1LOCh. 31 - Prob. 31.2LOCh. 31 - Prob. 31.3LOCh. 31 - Prob. 31.4LOCh. 31 - Prob. AFCTCh. 31 - Prob. BFCTCh. 31 - Prob. CFCTCh. 31 - Prob. 1CTQCh. 31 - Prob. 2CTQCh. 31 - What would be the appropriate change in the U. S...
Ch. 31 - Prob. 2FCTCh. 31 - Prob. 1PCh. 31 - Prob. 2PCh. 31 - Prob. 3PCh. 31 - Prob. 4PCh. 31 - Prob. 5PCh. 31 - Prob. 6PCh. 31 - Prob. 7PCh. 31 - Prob. 8PCh. 31 - Prob. 9PCh. 31 - Prob. 10PCh. 31 - Prob. 11PCh. 31 - Prob. 12PCh. 31 - Take a look at Figure 31-2. Suppose that initially...Ch. 31 - Prob. 14PCh. 31 - Prob. 15PCh. 31 - Prob. 16P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Imagine a firm's marginal abatement cost function with existing technologies is: MAC = 20 E. If the firm adopts new pollution abatement technologies, its marginal abatement cost function will be: MAC = 100.5E. The adoption costs for the new technology are $4. If the government raises the tax on emissions from $2 to $4, the firm's total costs increase by $ HINT: Total costs include tax payments, total abatement costs, and (if relevant) adoption costs for the new technology. Question 14Select one: a. $20. b. $ 24. c. $10. d. $30.arrow_forwardQ) Imagine any number of identical boats can fish along the North Carolina coast. The value of fishing (V) per boat as a function of the number of boats (N) is: V = 50 − 5N. The marginal value (MV) to the fishery of an additional boat is: MV = 50 − 10N. For each boat, the costs of fishing (C) are $10. If the fishery were managed in a way that only the socially efficient # of boats are allowed to enter the fishery, what would be the net value (i.e., total value minus total costs) of the fishery? Solve it early. Not in excelarrow_forwardQ) Imagine any number of identical boats can fish along the North Carolina coast. The value of fishing (V) per boat as a function of the number of boats (N) is: V = 50 − 5N. The marginal value (MV) to the fishery of an additional boat is: MV = 50 − 10N. For each boat, the costs of fishing (C) are $10. If the fishery were managed in a way that only the socially efficient # of boats are allowed to enter the fishery, what would be the net value (i.e., total value minus total costs) of the fishery? Explain it early. Not solve in excel worksarrow_forward
- Q) Imagine any number of identical boats can fish along the North Carolina coast. The value of fishing (V) per boat as a function of the number of boats (N) is: V = 50 − 5N. The marginal value (MV) to the fishery of an additional boat is: MV = 50 − 10N. For each boat, the costs of fishing (C) are $10. If the fishery were managed in a way that only the socially efficient # of boats are allowed to enter the fishery, what would be the net value (i.e., total value minus total costs) of the fishery? Correctly explain now. Not in excelarrow_forwarda) Consumers Consider N consumers. Consumer i has the utility function: Ui = xi - k*(E2/2) Where x denotes spending on private goods and E the total level of polluting emissions. (i) Find the marginal rate of substitution in consumption between emissions and the good private to the individual i.arrow_forwarda) What is meant by Pareto efficiency in economics? Explain. b) List two examples of market failures that are relevant for environmental economics.arrow_forward
- Question #2. Assume that an administered water district faces a marginal benefit curve for water represented by the linear function P= MB = -0.5Q + 1200 where Q is the quantity of water in acre-feet. Assume the district’s total cost function is Q2 + 200Q. What is the economically efficient level and price of water use? What would be the revenue of the district under a marginal cost pricing scheme? What would be the revenue of the district under an average cost pricing scheme? What would be the total cost of water under the average cost pricing scheme? Given your answers to 5a through 5d—what is the profit or loss of the water district under each pricing scheme? Why would a water district choose to price water based on average costs? What is consumer surplus under each pricing scheme? What is producer surplus under each pricing scheme? Describe two other water pricing approaches and their potential impact on water consumption. In a brief essay explain the difference between…arrow_forwardProvide a reason why the marginal damages from some emissions may be increasing with the level of emissions (like in the figure above). Suppose the unregulated level of emissions is E3. What area(s) represent the total damages from unregulated emissions? Suppose emissions levels drop from E3 to E1. What area(s) represent the total benefits from the emissions reduction from E3 to E1? What point denotes the marginal damage from emissions at E2?arrow_forwardThe “demand” (MB) curve for pollution abatement would be given by the pollution damages that could be avoided by each successive unit of abatement. There are likely to be declining marginal benefits from each additional unit of abatement. The marginal cost of abatement is likely to start small, and then grow, yielding increasing marginal abatement costs from each additional unit of abatement. The socially efficient amount of abatement would be given by the intersection of the falling marginal benefit (avoided damages) curve and the rising marginal abatement cost curve. However, unregulated firms can often simply ignore the damages caused by the pollution they create. a. Illustrate the marginal private benefit curve, as perceived by the firm, if they don’t have to think about their pollution at all, and show the firm’s privately efficient amount of abatement. b. If the regulatory agency sets a standard for expected levels of abatement, and charges the firm a huge fine per unit if…arrow_forward
- The following graph represents the market for high-emissions cars. Answer this question assuming that the externality is not internalised. In the stylised model, what is the cost of pollution per high-emission vehicle purchased by buyers equal to?arrow_forwardA government study has concluded that the marginal benefits from controlling cow-induced methane production are given by MB = 100 – R where R represents the percentage reduction from unregulated levels. The marginal cost to farmers of methane reduction (through better cow feed) is given by MC = 20 + R a) What is the socially optimal level of methane reduction? [Hint: Let MB=MC] b) If the government were to adopt a methane fee that farmers must pay for each percent of methane they do not reduce, how should this fee be set to achieve the optimal level of R? {Hint: This fee will be reflected in the MC to the firm] c) Suppose there are two farmers in this market with differing costs of methane reduction. The first has marginal costs given by MC1 = 20 + 2/3 R1 whereas the second has marginal costs given by MC2 = 20 +2R2 Total methane reduction is the average from these two farms. If the government mandates that each farm reduce methane by the optimal percentage calculated in part a), what…arrow_forwardImagine a firm’s marginal abatement cost function with existing technologies is: MAC = 12 – E. If the firm adopts new pollution abatement technologies, its marginal abatement cost function will be: MAC = 6 – 0.5E. The adoption costs for the new technology are $6. If the government raises the tax on emissions from $2 to $4, the firm's total costs increase by $_____. HINT: Total costs include tax payments, total abatement costs, and (if relevant) adoption costs for the new technology. Select one: a. $12. b. $8. c. $10. d. $16.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Environmental Law: The Clean Air Act; Author: LawShelf;https://www.youtube.com/watch?v=1-SH3kJpVA4;License: Standard Youtube License