Chemical-producing factories are located upriver from a water-ski club.The graph shows the market for chemicalsDraw a point at the market equilibrium when the water-ski club owns the riverIn the market for chemicals,OA. the officient quantity of pollution is such that the price of chemicals equals marginal external costOB. the efficient quantity of pollution is larger if the factories own the river than if the water-ski clubowns the riverOC. with property rights, the MC curve shows only part of the marginal cost of producing chemicalsOD. at the market equilibrium, the efficient quantity of pollution is zero350-300-250-200150TOO50Price and cost (dollars per ton)MSGD-MBMG3ŚQuantity (tons per week)>>> Draw only the objects specified in the question.

Marginal Social Cost (MSC) is a monetary idea that represents the extra fee imposed on society as a…

Answered: Chemical producing factories are…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following graph represents the market for high-emissions cars. Answer this question assuming that the externality is not internalised. Which quantity is socially optimal (i.e. what is the efficient quantity)? What is the deadweight loss generated by the externality?
19:36 ! 13:41 3.00 KB/S 015 The market below depicts supply, demand and marginal social cost in the widget market. 0.00 0.00 0.70 0.00 050 0.40 020 50 100 125 150 175 2001 To correct for the externality, what should be used? Oa. A subsidy of $0.20 b. A tax of $0.20 Oc. A subsidy of $0.30 Od. A tax of $0.30 =
There are three industrial firms in a town Firm Initial Pollution Level Cost of Reducing Pollution by 1 Unit A 30 units $20 40 units 20 units B с $30 $10 The government wants to reduce pollution to 60 units, so it gives each firm 20 tradable pollution permits. 1. Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation? 2. How much higher would the costs of pollution reduction be if the permits could not be traded?
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Im confused on this question.
This is an end-of-chapter problem that I'm struggling with! thanks!
Explain: “Without a market for pollution rights, dumping pollutants into the air or water is costless; in the presence of the right to buy and sell pollution rights, dumping pollutants creates an opportunity cost for the polluter.” What is the significance of this opportunity cost to the search for better technology to reduce pollution?
3. The effect of negative externalities on the optimal quantityof consumption Consider the market for pharmaceuticals. Suppose that a pharmaceutical factory dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the factory. Producing additional pharmaceuticals imposes a constant per-unit external cost of $280. The following graph shows the demand (private value) curve and the supply (private cost) curve for pharmaceuticals. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $280 per unit. PRICE (Dollars per unit of pharmaceuticals) 800 720 640 560 480 400 320 240 160 80 O 1 2 3 □ O O ㅁ 4 Supply (Private Cost) Demand (Private Value) 5 6 7 QUANTITY (Units of pharmaceuticals) Social Cost ? The market equilibrium quantity is units of pharmaceuticals, but the socially optimal quantity of pharmaceuticals production is units. To create an incentive for the firm to produce the socially optimal…
Air pollution creates a negative externality—a cost suffered by a third party as a result of an economic transaction. A standard solution to a negative externality is a Pigouvian tax, a tax that raises the marginal private cost of pollution emissions to the level of the marginal social cost. The socially optimal quantity of pollution emissions is then determined by the intersection of the marginal private benefit, or demand, curve and the marginal social cost curve. The article notes that "putting a dollar value on the benefits of cleaner air has been difficult." Assuming this problem has been resolved, in the accompanying diagram, move the endpoints of line Smarginal social cost to show the marginal social cost curve. Then move the line labeled "Tax" to show the amount of the tax needed to limit emissions to the socially optimal level.
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Consider a manufactured good whose production process generates pollution. The demand for the product is Q=100-3P. The market supply function is Q=P. The marginal external cost is MEC=2Q. What is the emissions tax that needs to be imposed to achieve the social optimum? Illustrate on graph What is the economic incidence of this emissions tax? In other words, what proportion of this tax will be paid by producers of this product and what proportion of the tax will be paid by consumers?
in the town of Externalia, vaccination programs create additional benefits to the community, beyond the consumers who actually purchase vaccinations The graph on the right shows the market for vaccinations 11 Using the line drawing tool, show a ine representing the true demand for vaccinations, if the external benefit were taken into account Label your line D 2) Using the point drawing tool show the new equibrium price and quantity Label your point E Carefully follow the instructions above, and only draw the required objects Price (5) Qo Quantity of vaccinations (housands)

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