BN8.3 Case Three Neighboring Towns - Marshland, Dampland, & Wetland - all border the same Lake. The Lake frequently floods causing damage to property in all 3 Towns. Each Town would benefit from Flood Mitigation, but the Level of Benefits differs. With Z representing the Level of Mitigation: for Marshland, MB = 3-Z for Dampland, MB = 4-2Z for Wetland, MB = 11- Z The marginal cost of flood mitigation is MC = 2 + 12Z Questions: (a) What is the Socially Optimal Level of Z? (b) What would each Individual Town be willing to Pay for this Level of Flood Mitigation? (c) The Representative from Wetland proposes that each Town Pay an equal share for the Optimal Level of Flood Mitigation. Would this Pricing Strategy work?

BN8.3 Case Three Neighboring Towns - Marshland, Dampland, & Wetland - all border the same Lake. The Lake frequently floods causing damage to property in all 3 Towns. Each Town would benefit from Flood Mitigation, but the Level of Benefits differs. With Z representing the Level of Mitigation: for Marshland, MB = 3-Z for Dampland, MB = 4-2Z for Wetland, MB = 11- Z The marginal cost of flood mitigation is MC = 2 + 12Z Questions: (a) What is the Socially Optimal Level of Z? (b) What would each Individual Town be willing to Pay for this Level of Flood Mitigation? (c) The Representative from Wetland proposes that each Town Pay an equal share for the Optimal Level of Flood Mitigation. Would this Pricing Strategy work?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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• Give four (4) economic activities that generate both positive and negative externalities
this is question one for reference
21
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The EPA determined the presence of a public health and ecological damage externality cost in dollars of MEC=0.020 associated with Q units of nitrogen oxides output of a chemical process per month.There was no evidence of external benefit. The marginal social benefit was estimated as MSB=50-0.4Q and the marginal social cost as MSC=2+ 0.4Q mpenveo What is the socially conscious solution?
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This was the same question as previously which was answered as A+B. however, that is not an option. Which quantity is socially optimal (i.e. what is the efficient quantity)? In the stylised model, what is the cost of pollution per high-emission vehicle purchased by buyers equal to?
Compared with a standard, both tradable discharge permits and emission taxes tend to be preferred by firms impose larger payment burdens on cach and every polluter have been more commonly used in practice to address actual pollution problems provide greater incentives for firms to search for innovative ways to abate pollution
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For Questions 26 and 27, assume that two different coastal cities are competing to have their location selected by the Federal Government to build a Major Deepwater Shipping Port for large container ships. The cost to build the port and more highway access is $200MM but the city that gets project will get $16MM in fees per year as well as jobs for 3,600 people. City A spends $1,280,000 on lobbyists, presentations and trips to Washington, D.C. to try to win the project and City B spends $1,180,000 to try to win. The Total loss to Society of the entire process of selecting & building the Shipping Port is: $202,460,000 $186,460,000 $200,000,000 $16,000,000
#2. You have two periods. I've given you an externality with MEC=0.05q1. So, MB1=8-0.4q1 MB2=8-0.4q2. So, the externality is a cost realized in period 2 but caused by period 1's production choice. Q1 belongs to the first period, and Q2 is the second.