8. (TRUE/FALSE) In the direction of increasing emissions, the MAC is actually a MB function 9. (TRUE/FALSE) There will be higher numbers of polluters in the long run under no regulation compared to regulation with an emissions subsidy

8. (TRUE/FALSE) In the direction of increasing emissions, the MAC is actually a MB function 9. (TRUE/FALSE) There will be higher numbers of polluters in the long run under no regulation compared to regulation with an emissions subsidy

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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7) A Detroit factory is polluting more than the socially optimal amount. The city government then imposes a lump sum tax on the business, but the business didn't change how much they were polluting. Explain what was wrong with the city's decision.
4. Understanding different policy options to correct for negative externalities Carbon dioxide emissions have been linked to melting of sea ice. The following table lists some potential regulations targeting the amount of airborne carbon dioxide. For each policy listed, identify whether it is a command-and-control policy (regulation), tradable permit system, corrective subsidy, or corrective tax. Tradable Permit System Public Policy . The government limits total carbon-dioxide emissions by all factories to 250,000 tons per ten years. Each individual factory is given the right to emit 280 tons of carbon dioxide, and factories may buy and sell these rights in a marketplace. Trees take carbon dioxide out of the air and convert it to oxygen, so the government funds a tree-planting initiative by offering $500 to any citizen who plants a tree. The government orders every factory to adopt a new technology, which reduces carbon-dioxide emissions into the atmosphere. The government charges…
(a) Shortly explain the relationship between elasticity of a good and the consumption tax rate it should be imposed upon it. (b) What do we man by rivalry of a good? Give examples of rival and non-rival goods. To what extent is rivalry a crucial aspect of a public good? (c) Give examples of positive and negative production and consumption externalities. (so you need to give 4 examples in total) (d) Explain whether the Coase theorem is useful in practice. (e) Define vertical and horizontal equity objectives of a tax system. Which one do you think is more important in establishing equity and/or fairness? (f) What are the political implications of the First and Second Welfare theorems? Shortly explain. 3
No written by hand solution
As abatement efforts increase (pollution is reduced., the marginal benefits from abatement and the marginal costs of abatement decline; rise rise; decline rise; rise decline; decline
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=05 23 24 31 32 Ob many fri Oc one small m Od a few large s 39 40 48 Question 27 Price 2000T4051 $14 $12 B(2,975) $10 A493) $8 F(6,6.5) $6 AC MC 54 C(8,3.5) $2 MR SO 今 35% 23456789 Quantity Consider the diagram above. If the monopolist is regulated and is forced to produce the efficient quantity, then his profits are approximately Select one: 144 B. -12 Oc-16 026 Question 28 Not yet answered Marked out of 1.00 PFlag question
4. Understanding different policy options to correct for negativeexternalities Carbon dioxide emissions have been linked to melting of sea ice. The following table lists some potential regulations targeting the amount of airborne carbon dioxide. For each policy listed, identify whether it is a command-and-control policy (regulation), tradable permit system, corrective subsidy, or corrective tax. Tradable Permit System Public Policy The government limits total carbon-dioxide emissions by all factories to 260,000 tons per five years. Each individual factory is given the right to emit 230 tons of carbon dioxide, and factories may buy and sell these rights in a marketplace. Trees take carbon dioxide out of the air and convert it to oxygen, so the government funds a tree-planting initiative by offering $440 to any citizen who plants a tree. The government orders every factory to adopt a new technology, which reduces carbon-dioxide emissions into the atmosphere. The government charges…
500 450 The graph on the right may help in answering question 25 400 350 300 250 200 150 100 50 O 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 Quantity Demand MC Exter nality MC private MC Social A competitive tire manufacturing industry spews emissions into the air at47 per tire a marginal cost of 1.5-q, where q is the quantity of tires produced per month (in thousands). The industry marginal cost, excluding the cost of emissions (private marginal cost), is 4 + 4•q, expressed in $ per tire. The inverse demand curve for tires is p = 480 - 3-q, also expressed in $ per tire. In order to achieve the socially efficient level of tire production, which takes into account the optimal level of air pollution, the government levies a tax on the industry. What is the efficient pollution tax? $84 per tire $101 per tire $152 per tire Price
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Some economists claim that early child care generates an external benefit to society. a. What is the market equilibrium? What is the socially optimal outcome? How do they differ? b. The government is planning to provide a per-unit subsidy for child care to achieve the socially optimal outcome. How large should this subsidy be? c. How much is the total government subsidy each month to reach a socially optimal outcome?
BN12.2 (d) (e) Case: The market for dry cleaning is reflected by the demand and supply curves (Q is in thousands): Pa = 5-Q Ps= 2 + 2Q Producing dry cleaning creates ground water pollution with a constant marginal external cost of 1.2. Question: (d) What is the equilibrium price and quantity if the government decides to impose a per-unit tax of $1.20 is added to dry cleaning? (e) Does the tax cause a Pareto improvement? (Use the definition of a Pareto improvement to justify the answer.)