A diesel refinery is upstream of an industrial farm. The runoff from the refinery pollutes the river and damages the crops. The farm earns $499 using the polluted water, but would earn $628 if it were clean. The refinery earns $1772 but would only earn $1607 if it had to divert resources to prevent the runoff. There are no environmental laws. Assume that a scrubbing machine that would prevent the runoff costs $24 plus an installation cost. What is the most that installation could cost for clean water to be the socially optimal outcome achieved through private bargaining? O a. $141.00 O b. $36.00 O c. Anything, the machine is not required as clean water will already be achieved. O d. $105.00 e. $165

A diesel refinery is upstream of an industrial farm. The runoff from the refinery pollutes the river and damages the crops. The farm earns $499 using the polluted water, but would earn $628 if it were clean. The refinery earns $1772 but would only earn $1607 if it had to divert resources to prevent the runoff. There are no environmental laws. Assume that a scrubbing machine that would prevent the runoff costs $24 plus an installation cost. What is the most that installation could cost for clean water to be the socially optimal outcome achieved through private bargaining? O a. $141.00 O b. $36.00 O c. Anything, the machine is not required as clean water will already be achieved. O d. $105.00 e. $165

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: How do taxes, pollution charges, and cap-and-trade work to reduce emissions? Taxes and…

A: Emissions are the substances or particles that are emitted in the environment such as air or water…

Q: A manufacturer produces some output called "Product" using a raw material called Input". To…

A: There are two cases hereCase1- When factory is located near sopt N then the Shipping Cost will…

Q: A firm has a marginal emissions benefit of 100-0.5*E in each of 2 years, where E measures emissions…

A: The marginal emission refers to the extra quantity of pollution or greenhouse gases launched into…

Q: Supply -Induced Demand The chart below depicts an individual's utilization of her regular…

A: Minimum Benefit (MB) : The minimum benefit represents the lowest level of value or service that a…

Q: Because of Environmental Protection Agency pollution credits to biodiesel producers, biodiesel…

A: Answer is given below

Q: 25 true or false Under D/P after sight, when the importer makes payment the collecting bank will…

A: DP- It is the term used at sight for the payment. It was made before the release of documents from…

Q: Petrol Corp. owns several drilling operations in the Gulf of Mexico, refineries, service stations,…

A: Because refineries and tanker trucks are controlled by the Clean Air Act, the environmental manager…

Q: If value of output is $300 million, net value added at factor cost is $160 million, depreciation is…

A: The information being given to us is:- value of output is $300 million value added at factor cost is…

Q: How would you assess the economic benefits vs the social and environmental costs?

A: This question is asking about how to conduct a cost-benefit analysis of a potential coal-fired power…

Q: Cyber Novelties Cyber Novelties is a direct sells company that sells small gadgets over the…

A: Given in the proposal that, $75,000 annually and $0.05 per unit for extra promotion, will lead to…

Q: A large sewer system will cost P180,000 annually. There will be favorable consequence to the general…

A: We know the private cost is the cost used in producing or for output nad external cost is the damage…

Q: A cement factory is located near a river which is also used for training sessions by a team of…

A: In welfare economics, externalities are the costs and benefits that are derived from an economic…

Q: Data indicates that 20,000 cars in your town face unrecoverable losses totaling $24273776 annually…

A: In a town, there are 20,000 cars that are facing unrecoverable losses according to data. These…

Q: US 201.) On page 211-212, in the Ethics section at the bottom of the page, there is a discussion…

A: According to this case, a contract is a contract and an agreement between two parties even if…

Q: Owning, operating, and maintaining an automobile carries with it private internal costs to the…

A: Private Internal costs : Cost of automobile Charges for fuel Charges for repair and regular…

Q: Please see attached.

Q: The MD and MAC curves below represent damage and abatement cost functions for a firm liable for…

A: The total cost for the firm would be the sum of its abatement cost and compensation…

Q: There is a company that emits a moderate amount of fossil fuel emissions. It would cost them 10…

A: Cap-and-trade program : It is a market-based approach to controlling and reducing greenhouse gas…

Q: Amex Toy Makers, Inc. markets toys they know pose a possible serious hazard to children under…

A: In a market, when a firm produces a product or service, there used to be some positive or negative…

Q: Car A initially costs 500 more than car B. but it consumes 0.04 gallon/mile versus 0.05 gallon/mile…

A: here we calculate the miles of use per year does car A become preferable to car B as follows

Question

A diesel refinery is upstream of an industrial farm. The runoff from the refinery pollutes the river and damages the crops. The farm earns $499 using the polluted water, but would earn $628 if it were clean. The refinery earns
$1772 but would only earn $1607 if it had to divert resources to prevent the runoff. There are no environmental laws. Assume that a scrubbing machine that would prevent the runoff costs $24 plus an installation cost. What
is the most that installation could cost for clean water to be the socially optimal outcome achieved through private bargaining?
O a. $141.00
O b. $36.00
O c. Anything, the machine is not required as clean water will already be achieved.
O d. $105.00
O e. $165

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

when left the treat environment as if it has no value the polluters in region release collective 500 tons of pollutant per year. The damages from this pollutant are MD=10e while aggregate abatement cost is MAC=10+5a. Calculate; A)efficient aggregate levels of abatement and emissions B)use calculations to show that a one ton increase or decrease in emissions would not be efficient
Talk about Environmental scanning.
What companies have failed to adequately respond and adapt to the COVID-19 economy?
n order to create more jobs in the region, the local government gave permission to a foreign investor to build a chemical plant not far from a residential area. Analysts predict that real estate prices will drop by 15%15%. Currently, the total value of real estate is $40$⁢40 million.Calculate the potential external cost for the residents in this area of building the chemical plant. Write the exact answer. Do not round.
Can I have help on this question?
Aquatic invasive species are a threat to the ADK region as they have the potential to negatively impact the aquatic ecosystems of Adirondack lakes. These species include plants which choke up beach fronts, mussels that eliminate phytoplankton on which native ecosystems depend, and fish with no native predators that take over ecosystems. As part of a cost-benefit analysis, you have been asked to estimate the damages from these invasive species. Describe, specifically, how you would use at least TWO different non-market valuation techniques to estimate the damages from invasive species in the Adirondacks.
Godo
You own a family farm, worth $500,000, and need to decide what to do with this year’s earnings of $400,000. (i) You could put the money in the bank and earn a safe 5% return. (ii) Or you could pay $200,000 to plant a new crop, which will yield a harvest in six months; if there is rain, the harvest will bring in $1.000,000 in revenues, but if there is a drought it will yield just $100,000 in revenues. (iii) A third alternative is to plant Santo drought-resistant seed corn, which will cost $500,000, but yield revenues of $1,000,000 if there is rain or $700,000 if there is no rain. You are risk averse, and your reference for family wealth (W) is given by U(W) = √W [Square root of W]. The probability of a summer drought is 0.33. Which of the three options should you choose? Explain.
a b C $40; $40 $40; zero $150,000; $150,000 zero; $40
Help with this problem
Pls help ASAP
How much carbon dioxide would you prevent from entering the atmosphere in one year if you replace a 100 w light bulb with a CFL light bulb that uses 30 watts and they fix your that you have on 8 hours per day round the answer to the hundredth place. Your friend uses 5.5 gallons of gas each month mowing his lawn approximately how much CO2 pollution does it cause per month. How much does it create per year. Assuming he mows 6 months per year.