Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter 4, Problem 16SQ
To determine
The impact of freely allowing the firms to pollute the environment.
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Students have asked these similar questions
Let the supply and demand for widgets be given by the following schedule.
Price: 3, 4, 5, 6, 7, 8, 9, 10, 11
Quantity Supplied: 100, 200, 300, 400, 500, 600, 700, 800, 900
Quantity Demanded: 900, 800, 700, 600, 500, 400, 300, 200, 100
a. What quantity will be produced here?
b. What quantity is efficient if there are no external costs or benefits?
c. What quantity is efficient if there is an external cost of $6 per unit from pollution caused by the widget factories?
This summer, the temperature records on each other's feet seem to be beaten. In Sweden, the temperature has recently risen to 43 degrees and birds are falling from the sky over exhausted and dying. Carbon emissions are one of the main challenges facing mankind today. Explain the market failure caused by the emissions. Under competitive conditions, the government can use various control tools to establish efficient quantities, e.g. with a fee.
Show the effect of such a solution on a diagram and explain in detail why an economical amount involves some pollution.
In a monopoly situation, it is not as simple as establishing efficiency by charging emissions. Explain in words and pictures how the different interplay between the cost factors of a company and pollution costs can cause certain government tariffs on pollution to be cost-effective on the one hand and inefficient on the other.
Soybeans are produced and sold in a perfectly competitive market. The fertilizers used in soybean production generate a negative externality by seeping liquid contaminants into local rivers.
(a) Draw a correctly labeled graph of the soybean market, and show each of the following.
(i) The marginal private cost, labeled MPC
(ii) The marginal social cost, labeled MSC
(iii) The marginal social benefit, labeled MSB
(iv) The market equilibrium quantity, labeled QC
(v) The socially optimal quantity, labeled QS
(vi) The area of the deadweight loss, shaded completely
(b) Assume the government sets a binding price floor such that the quantity demanded in the market is between QS and QC.
(i) What will happen to the quantity produced?
(ii) Will the price floor reduce the deadweight loss? Explain.
(c) Assume instead of a price floor, the government decides to impose a lump-sum tax. What will happen to the socially optimal quantity? Explain.
(d) Assume instead of a lump-sum tax, the government…
Chapter 4 Solutions
Micro Economics For Today
Ch. 4.2 - Prob. 1YTECh. 4.2 - Prob. 2YTECh. 4.2 - Prob. 3YTECh. 4.2 - Prob. 4YTECh. 4.3 - Prob. 1YTECh. 4.3 - Prob. 2YTECh. 4 - Prob. 1SQPCh. 4 - Prob. 2SQPCh. 4 - Prob. 3SQPCh. 4 - Prob. 4SQP
Ch. 4 - Prob. 5SQPCh. 4 - Prob. 6SQPCh. 4 - Prob. 7SQPCh. 4 - Prob. 8SQPCh. 4 - Prob. 9SQPCh. 4 - Prob. 10SQPCh. 4 - Prob. 1SQCh. 4 - Prob. 2SQCh. 4 - Prob. 3SQCh. 4 - Prob. 4SQCh. 4 - Prob. 5SQCh. 4 - Prob. 6SQCh. 4 - Prob. 7SQCh. 4 - Prob. 8SQCh. 4 - Prob. 9SQCh. 4 - Prob. 10SQCh. 4 - Prob. 11SQCh. 4 - Prob. 12SQCh. 4 - Prob. 13SQCh. 4 - Prob. 14SQCh. 4 - Prob. 15SQCh. 4 - Prob. 16SQCh. 4 - Prob. 17SQCh. 4 - Prob. 18SQCh. 4 - Prob. 19SQCh. 4 - Prob. 20SQ
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