2 Many municipalities are concerned about the environmental impact of plastic bags, which often end up as litter, clogging drains, andhanging from tree branches. A town is considering whether to impose a tax on plastic bags to be collected at the store or a per personquota. Cindy and Carl are two average citizens who both use plastic bags when they go grocery shopping Plastic bags are currentlyfree when they shop. The figures below show each individual's demand curve for plastic bags(A) Quota(8) TaxPricePrice$1.10$1. 10$1.00Quota$1.00$0.90S0 90$0 80S0 70S0 60$0 80$0 70$0 60$0 50$0 40$0 30$0 20$0.50Cindy$0 40$0.30Cindy$0 20CelCarl$0.10$0.105 10 15 20 25 30 35 40 45 50 55 605 10 15 20 25 30 35 40 45 50 55 60Quantity of plastic bagsQuantity of plastic bagsInstructions: Enter your answers for quantity as a whole number Round your answers for price to two decimal placesa. Under the quota, the willingness to pay for the last bag used for Cindy is Sand for Carl, $b. Under the tax, Cndy will usebags and Cart wil usebagsThe willingness to pay for the last bag used for Cindy is Sand for Carl, Sc The town should adopt aOplastic bag tax, because revenue will be collected and the cost will be lowerO plastic-bag tax, because it achieves the same outcome in terms of the number of bags but does so more efficientlyOplastic-bag quota, because it achieves the same outcome in terms of the number of bags but does so more efficientlyO plastic-bag quota, because fewer people wil complain

(A) Under the quota, the marginal benefit of the last bag for Cindy is $0.60 and for Carl $0.30…

aructions: Enter your answers for quantty as a whole number Round your answers for price to two decimal places Under the quota the willingness to pay for the last bag used for Cindy is $ and for Carl $ Under the tax, Cndy will use bags and Cart wil use[ bags The wiingness to pay for the last bag used for Cndy s $ and for Carl S The town should edopta Oplastic bag tax because revenue will be colected and the cost will be lower Oplastic-bag tax becauset achieves the same outcome in terms of the number of bags but does so more etficiently Oplastic-bag quota because itachieves the same outcome in terms of me number of bags but does so more efficienty

aructions: Enter your answers for quantty as a whole number Round your answers for price to two decimal places Under the quota the willingness to pay for the last bag used for Cindy is $ and for Carl $ Under the tax, Cndy will use bags and Cart wil use[ bags The wiingness to pay for the last bag used for Cndy s $ and for Carl S The town should edopta Oplastic bag tax because revenue will be colected and the cost will be lower Oplastic-bag tax becauset achieves the same outcome in terms of the number of bags but does so more etficiently Oplastic-bag quota because itachieves the same outcome in terms of me number of bags but does so more efficienty

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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