3. Suppose the EPA wants to reduce pollution to the socially optimal level. Based on the datain the table below, what is the optimal level of pollution?Total cleanupTotalTotal(tons)BenefitCost502851831152841403951605117963719776821490230105102451201125913712273156132861771429920015311225

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Answered: 3. Suppose the EPA wants to reduce…

3. Suppose the EPA wants to reduce pollution to the socially optimal level. Based on the data in the table below, what is the optimal level of pollution?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The optimal level of pollution is O the level that has no effect on the environment. O found where the marginal cost of pollution equals the marginal benefit. found where the marginal benefit of pollution is maximized. O found where the total cost of pollution equals the total benefit. zero.
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8.1 Suppose we have an agricultural valley 100 km by 50 km, with a polluting electricity power plant. The power plant causes pollution problems in a narrow strip of land downwind of the plant, and within this valley. 10 km in length and 500 m in width, but no problems outside of that area. The total effect of the pollution is to make crop land less productive. If we were to clean up the pollution, would we expect land prices to increase? Where? Would we expect wages to decline? Would the changes in land prices and/or wages fully reflect the benefits of cleaning up the pollution? Why or why not?
On the demand curve for flowers below, please answer the following questions Price per unit (dollars) 10 8 6 20 25 30 Demand Quantity a. What do the points along the curve represent? b. Calculate the Elasticity of Demand between point b and c. c. What is the curve elastic, unitary elastic or inelastic? d. What does that type of elasticity mean for the florist?
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1. Briefly discuss some ways the government could ensure a market with a positive externality could encourage production of the socially optimal output. 2. Do you believe higher education provides our economy with a positive externality? Why or why not? Do you believe the steps that the federal government takes to encourage the socially optimal amount of higher education be produced/consumed is appropriate? Too much? Too little? Why? (Use appropriate economic theory to support your position.)
The equations below represent the demand and supply curves for annual gym memberships in a city. qD= 500 − 2p, qS=0.5p − 50 Because physical activity leads to better health, the city estimates that each annual gym membership saves $30 of public spending on healthcare per year (a positive externality). a. In a graph, show the market and the socially optimal equilibria for annual gym memberships in this city. Does the market equilibrium result in under- or over-consumption of memberships? What is the deadweight loss associated with the market failure in this situation? b. Would you recommend this city to implement a subsidy (a negative Pigouvian tax) to correct this market failure? If so, how much would be the subsidy per unit? What would be the effects of your proposed policy on the quantity, price, and aggregate welfare?
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Are socially efficient level of emission and market efficiency is equal? Explain with help of diagram?