Macroeconomics: Principles, Problems, & Policies
20th Edition
ISBN: 9780077660772
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 4, Problem 7RQ
Use marginal cost/marginal benefit analysis to determine if the following statement is true or false: “The optimal amount of pollution abatement for some substances, say, dirty water from storm drains, is very low; the optimal amount of abatement for other substances, say, cyanide poison, is close to 100 percent.”
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Use marginal cost/marginal benefit analysis to determine if the following statement is true or false: “The optimal amount of pollution abatement for some substances, say, dirty water from storm drains, is very low; the optimal amount of abatement for other substances, say, cyanide poison, is close to 100 percent
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?
Explain it early.
Not solve in excel works
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?
Solve it early.
Not in excel
Chapter 4 Solutions
Macroeconomics: Principles, Problems, & Policies
Ch. 4.A - Prob. 1ADQCh. 4.A - Prob. 2ADQCh. 4.A - Prob. 3ADQCh. 4.A - Prob. 1ARQCh. 4.A - Prob. 2ARQCh. 4.A - Prob. 3ARQCh. 4.A - Prob. 1APCh. 4 - Prob. 1DQCh. 4 - Prob. 2DQCh. 4 - Prob. 3DQ
Ch. 4 - Prob. 4DQCh. 4 - Prob. 5DQCh. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - Prob. 9DQCh. 4 - Prob. 1RQCh. 4 - Prob. 2RQCh. 4 - Prob. 3RQCh. 4 - Prob. 4RQCh. 4 - Prob. 5RQCh. 4 - Prob. 6RQCh. 4 - Use marginal cost/marginal benefit analysis to...Ch. 4 - Prob. 1PCh. 4 - Prob. 2PCh. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Prob. 5PCh. 4 - Prob. 6PCh. 4 - Prob. 7P
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- 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 city currently emits 16 million gallons (MG) of raw sewage into a lake that is beside the city. The table below shows the total costs (TC) in thousands of dollars of cleaning up the sewage to different levels, together with the total benefits (TB) of doing so. Benefits include environmental, recreational, health, and industrial benefits. Emissions Total Cost Marginal Cost Total Benefit Marginal Benefit 16 MG Current N/A Current N/A 12 MG 50 800 8 MG 150 1300 4 MG 500 1650 0 MG 1200 1950 Complete the table. What is the optimal level of sewage for this city? How can you tell?arrow_forwardSuppose that speeding imposes externalities on other people resulting in a social cost of $50. A town is considering hiring an extra police officer to give out speeding tickets. If we want to maximize social welfare (absent enforcement costs), which of the following statements are true? (Assume risk neutral drivers.) What happens to the socially optimal cost of the speeding ticket if the town decides to hire the police officer? a) It goes down b) It goes up c) The amount that it goes down depends on salary of the police officer d) The amount if goes up depends on the salary of the police officer e) None of the abovearrow_forward
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- 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 %arrow_forwardPlease drag and drop the markers 1 through 5 below to denote the appropriate position on the diagram that answers the question. a) Show with marker 1 the efficient level of marginal abatement costs. b) Show with marker 2 the marginal abatement costs if each produce must reduce pollution to 7.5 units. c) Denote with marker 3 the area that measures total abatement costs for each polluter. d) Show with marker 4 the marginal abatement costs if sources 1 and 2 merged and were constrained to a maximum total emissions of 15 units. e) Show with marker 5 the total abatement costs if both sources merged and were constrained to a maximum total emissions of 15 units. Marginal Cost (in dollars) MC MC, Quantity of Emissions Reduced A Source 1 10 5 4 13 14 15 15 14 13 12 11 10 8 O Source 2 5arrow_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
- Q.3. Externalities I Perhaps ironically, air conditioners produce heat as a waste product (to say nothing of any externalities from energy consumption). Air conditioner’s waste warm up nearby outdoor areas. This effect can be substantial in dense cities. Suppose that the following are the benefits/ costs from running an air conditioner on a 90 degree day (Q is the temperature reduction enjoyed by the consumer of the air conditioning): MPB=MSB=30-Q MPC=10 External Cost=5 a) Graph the private/social marginal benefit/cost curves described above. b) Determine the market equilibrium consumption of Q. c) Determine the socially optimal consumption level of Q. d) Calculate the consumer/producer surplus in b) and c). Calculate the deadweight loss in each, if applicable. e) What is the deal with producer surplus? f) Determine the tax that will yield the socially optimal consumption level. What is the revenue generated by the tax?arrow_forwardUse the model of environmental pollution to model the following changes in a polluting industry to: i) the socially optimal level of pollution; ii) the total abatement costs; and ii) the total damage costs (а) A new technology is invented that allows firms to reducе pollution associated with each level of production output. (b) The government announces a new commitnment to more strictly enforce current environmental regulations. (c) A new study finds the pollutant in question to be more carcinogenic than originally thought.arrow_forwardQuestions 1-4 The Alpha, Beta, and Gamma residents of a village are install street lights along the main street of the village The marginal benefit (Am) of the streetlights is: - Alpha: Am = 10.000-80x. - Beta: Am = 8.000-90x. - Gamma: Am = 14.000-70x 1. If a streetlight costs $8,000, what is the optimal collective number of streetlights? а. 25. b. 65. с. 100 d. 110 2. What is the marginal benefit of Alpha at the optimal number of street lights? а. О. b. 2,000 с. 3,500. d. 4,500. 3. What is the marginal benefit of Gamma at the optimal number of street lights? а. О. b. 6,000. с. 7,000 d. 9,000 4. How will Citizen Beta react to the proposal to levy a flat tax of $5,000 per citizen per streetlight to fund the development of streetlights? He a. Will be willing to pay the tax. b. will refuse to pay the tax. c. is unable to conclude whether Beta will be willing to pay the tax or not. d. will be indifferent to the "neither for nor against" street lights.arrow_forward
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