8.5 Figure 7.1 is drawn from Harrison and Rubinfeld's study of the demand for air pollutionin Boston. Make a copy of Figure 7.1 and then estimate the total willingness to pay, for ahousehold earning $15,000 per year, of reducing NOX levels from 6 to 4 parts per hundredmillion.MWTP ($)-500-1000-1500-2000-2500-300001NOx (pphm)1011Income $8500Income $11,500=Income = $15,000

From the figure below, we see that for a household with $15,000 incomeMaximum willingness to pay for…

Answered: 8.5 Figure 7.1 is drawn from Harrison…

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter14: Environmental Economics

Section: Chapter Questions

Problem 9SQP

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How can high-income countries benefit from covering much of the cost of reducing pollution created by low-income countries?
A city currently emits 15 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. Using the information in Table 12.13 calculate the marginal costs and marginal benefits of reducing sewage emissions for this City. What is the optimal level of sewage for this city? How can you tell?
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- Describe the circumstances under which it would be better for the government to sell pollution permits than to levy a corrective tax.
109 83 35 B 18 DE 223 634 925 1374 Emissions Consider the figure above. If the government imposes a tax of $83 per unit of emissions, then what areas represent the total cost of abatement?
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What should the government set their corrective tax to if they want to eliminate 7 units of pollution?
Bower likes to plant trees in his front year. His neighbors also derive pleasure form the trees in his front year. That is, Bower's trees provide a positive externality for the neighborhood. His marginal private benefit and the marginal social benefit (his and that received by his neighbors combined) are represented on the graph below, along with the marginal cost of planting a tree. Price, Cest (oll) $S0.00 45.00. 40.00 A 35.00 0 00 Margiaal Cot 25.00 20.00 15.00 argnel Soeiel Benett je 00 5.00 agnal hirde Bandfil 2 4 5 Quantity (mber of trees) Suppose the neighborhood subsidies Bower's trees. That is, neighbors give him enough money to plant the socially optimal number of trees. What area on the graph would be equal to the net social gain resulting form the subsidy? OA В Oc O A+ B
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EOC 11.04 Two businesses, X and Y, each dump 20 tonnes of pollution into a creek. In an effort to reduce pollution, the government will now require businesses to have a pollution permit to dump pollutants in the creek. Each business receives 10 pollution permits and they can use it to pollute or sell it to the other business (but lose the ability to pollute). To reduce pollution it costs business X $100 per tonne of pollutant eliminated and it costs business Y $50 per tonne of pollutant eliminated. Once the two businesses have traded these permits with each other, what is the likely outcome? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a business X emits 10 tonnes of pollutants and business Y emits 10 tonnes of pollutants. b business X no longer pollutes, and business Y will not lower the amount it pollutes. business X raises its pollution, and business Y will lower how much it pollutes. business Y no longer pollutes, and…

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