3. A city currently emits 16 million gallons (MG) of raw sewage into a lake that is beside the city. The following table 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. TC TB 16 MG Current Current 12 MG 50 800 8 MG 150 1300 4 MG 500 1850 O MG 1200 2000 a. Using the information in the table, calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. b. What is the optimal level of sewage for this city? How can you tell?

3. A city currently emits 16 million gallons (MG) of raw sewage into a lake that is beside the city. The following table 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. TC TB 16 MG Current Current 12 MG 50 800 8 MG 150 1300 4 MG 500 1850 O MG 1200 2000 a. Using the information in the table, calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. b. What is the optimal level of sewage for this city? How can you tell?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. A cap-and-trade scheme with the cap equal to efficient level of pollution _______.A. Leads to the price of a permit = MEC and achieves an efficient outcome.B. leads the price of a permit = MPC and achieves an efficient outcome.C. Leads to the price of a permit = MSC and achieves an efficient outcomeD. minimizes the cost of controlling pollution to the desired (efficient) level. E. A and D.
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43. A city currently emits 16 million gallons (MG) of raw sewage into a lake that is beside the city. Table 12.13 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. TC TB 16 MG Current Current 12 MG 50 800 8 MG 150 1300 4 MG 500 1850 O MG 1200 2000 Table 12.13 a. Using the information in Table 12.13 calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. b. What is the optimal level of sewage for this city? How can you tell?
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