164points01:17:49eBookPrintReferencesMcGrawHillThe figure below shows the demand curve for a U.S. farmer for irrigating his land. It costs $100 per acre to irrigate the land.Each acre of land irrigation generates salty runoff that winds up in the Colorado River. It costs $50 to desalinate this river waterso Mexican farmers can irrigate their crops.OPrice$275$250$225$200$175$150$125$100$75$50$2501070 80Irrigation (acres)20 30 80 506090D=MB =MBpvt100110120< PrevsociTools1MCpvtOa. Draw the marginal private cost of irrigation on the graph.Instructions: Use the tool provided 'MC and plot only the two endpoints across the entire range of output (0-100)./MC social16 of 25Next > 164points01:17:49eBookPrintReferencesMcGrawHillThe figure below shows the demand curve for a U.S. farmer for irrigating his land. It costs $100 per acre to irrigate the land.Each acre of land irrigation generates salty runoff that winds up in the Colorado River. It costs $50 to desalinate this river waterso Mexican farmers can irrigate their crops.OPrice$275$250$225$200$175$150$125$100$75$50$2501070 80Irrigation (acres)20 30 80 506090D=MB =MBpvt100110120< PrevsociTools1MCpvtOa. Draw the marginal private cost of irrigation on the graph.Instructions: Use the tool provided 'MC and plot only the two endpoints across the entire range of output (0-100)./MC social16 of 25Next >

"Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

a. Draw the marginal private cost of irrigation on the graph. Instructions: Use the tool provided 'MCpvt' and plot only the two endpoints across the entire range of output (0-100). b. Draw the marginal social cost of irrigation on the graph. Instructions: Use the tool provided 'MCsocial' and plot only the two endpoints across the entire range of output (0-100). c. A U.S. farmer will irrigate: d. The efficient level of irrigation is: acres. acres.

a. Draw the marginal private cost of irrigation on the graph. Instructions: Use the tool provided 'MCpvt' and plot only the two endpoints across the entire range of output (0-100). b. Draw the marginal social cost of irrigation on the graph. Instructions: Use the tool provided 'MCsocial' and plot only the two endpoints across the entire range of output (0-100). c. A U.S. farmer will irrigate: d. The efficient level of irrigation is: acres. acres.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter12: Environmental Protection And Negative Externalities

Section: Chapter Questions

Problem 14RQ: What is an externality?

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Similar questions

A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals to clear some of Sherwoods forest and grow com, but obtaining this additional economic output will have an environmental cost from reducing the number of trees. Table 12.11 shows possible combinations of economic output and environmental protection. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the number of trees, and the quantity of economic output, measured in corn, on the vertical axis. Which choices display productive efficiency? How can you tell? Which choices show allocative efficiency? How can you tell? In the choice between T and R, decide which one is better. Why? In the choice between T and S, can you say which one is better, and why? If you had to guess, which choice would you think is more likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice Q or S? Why?
What is the free rider problem?
The state of Colorado requires oil and gas companies who use fracking techniques to retune the land to its original condition after the oil and gas extractions. Table 12.9 shows the total cost and total benefits (in dollars) of this policy. Calculate the marginal cost and the marginal benefit at each quantity (acre) of land restored. See Production. Costs and Industry Structure if you need a refresher on how to calculate marginal costs and benefits. If we apply marginal analysis, what is the optimal amount of land to be restored?
HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will allow HighFlyer Airlines to give passengers more comfort and sell more tickets at a higher price. However, redesigning the cabin means rethinking many other elements of the airplane as well, like engine and luggage placement, and the most efficient shape of the plane for moving through the air. HighFlyer Airlines has developed a list of possible methods to increase cabin space, along with estimates of how these approaches would affect the planes operating costs and ticket sales. Based on these estimates, Table 13.5 shows the value of R, how much should the firm invest in R on top of the private return; that is, an R private return to HighFlyer Airlines would have a 9 social return. How much investment is socially optimal at the 6 interest rate?
Consider two ways of protecting elephants from poachers in African countries. In one approach, the government sets up enormous national parks that have sufficient habitat for elephants to thrive and forbids all local people to enter the parks or to injure either the elephants or their habitat in any way. In a second approach, the government sets up national parks and designates 10 villages around the edges of the park as official tourist centers that become places where tourists can stay and bases for guided tours inside the national park. Consider the different incentives of local villagers-who often are very poor-in each of these plans. Which plan seems more likely to help the elephant population?
In the Land of Purity, there is only one form of pollution, called gunk. Table 12.14 shows possible combinations of economic output and reduction of gunk, depending on what kinds of environmental regulations you choose. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the percentage reduction of gunk, and with the quantity of economic output on the vertical axis. Which choices display productive efficiency? How can you tell? Which choices show allocative efficiency? How can you tell? In the choice between K and L, can you say which one is better and why? In the choice between K. and N, can you say which one is better, and why? If you had to guess, which choice would you think is move likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice L or M? Why?
Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once we accounted for both the private and additional external costs, the market price increased by only 50. If the external costs were 100 why did the price only increase by 50 when we accounted for all costs?
What is productive efficiency? Allocative efficiency?
Suppose a city releases 16 million gallons of raw sewage into a nearby lake. Table 12.8 shows the total costs of cleaning up the sewage to different levels, together with the total benefits of doing so. (Benefits include environmental, recreational, health, and industrial benefits.) Using the information in Table 12.8, calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. See Production, Costs and Industry Structure if you need a refresher on how to calculate marginal costs. What is the optimal level of sewage for this city? Why not just pass a law that films can emit zero sewage? After all, the total benefits of zero emissions exceed the total costs.
As the extent of environmental protection expands, would you expect the marginal benefits of environmental protection to rise or fall? Why or why not?
How can high-income countries benefit from covering much of the cost of reducing pollution created by low-income countries?
What does a point inside the production possibility frontier represent?