Draw a MAC curve in the diagram below, making sure a MAC of 10 and an emissions of 20 are on the curve. Draw the curve so that it is relatively elastic. MAC in $ 10 10 a. 20 Q of emissions Explain why controlling emissions with a tax is difficult. (What happens if you set the tax higher or lower?) b. Suppose the emissions tax were 10. Explain why raising the tax would be a poor way to increase tax revenues.

Draw a MAC curve in the diagram below, making sure a MAC of 10 and an emissions of 20 are on the curve. Draw the curve so that it is relatively elastic. MAC in $ 10 10 a. 20 Q of emissions Explain why controlling emissions with a tax is difficult. (What happens if you set the tax higher or lower?) b. Suppose the emissions tax were 10. Explain why raising the tax would be a poor way to increase tax revenues.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

1. Externalities - Definition and examples An externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays nor receives any compensation for that effect. If the impact on the third party is adverse, it is called a externality. The following graph shows the demand and supply curves for a good with this type of externality. The dashed drop lines on the graph reflect the market equilibrium price and quantity for this good. Adjust one or both of the curves to reflect the presence of the externality. If the social cost of producing the good is not equal to the private cost, then you should drag the supply curve to reflect the social costs of producing the good; similarly, if the social value of producing the good is not equal to the private value, then you should drag the demand curve to reflect the social value of consuming the good. ? PRICE (Dollars per unit) QUANTITY (Units) Supply Demand Demand Supply With this type of…
O Macmillan Learning Using the information in the graph, answer the three questions. What is the value of the efficient per-unit tax at the socially optimal equilibrium? What are tax revenues at the socially optimal equilibrium, in millions? Price and cost (per pound) $20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 1 I 1 1 1 L 1 1 1 1 T per-unit tax: $ T F T tax revenues: $ 1 1 i 1 T 1 1 1 1 T T I I I Social marginal cost Private marginal cost 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Fertilizer (millions of pounds per year) Demand
Chris is buying apples. Suppose the price of apples is $1. Chris is willing to pay $5 for the first apple, and $2 for the second apple, and $0.5 for the third apple. What is Chris' consumer surplus? Your Answer: 5 Your Answer
Read the following excerpt: 'In the UK, fuel duty is levied per unit of fuel purchased and is included in the price paid for petrol, diesel and other fuels used in vehicles or for heating. The rate depends on the type of fuel: the headline rate on standard petrol and diesel has been reduced from 57.95 pence to 52.95 pence per litre.' Suppose that, in order to reduce greenhouse gas emissions, the UK government is considering raising fuel duty on standard petrol and diesel. Suppose that the government intends to earmark the additional fuel tax revenue, not for subsidising less carbon-intensive energy production (e.g., wind energy) but for supporting higher education (e.g., reduction in university fees). Are there additional theoretical implications in terms of efficiency in resource allocation, due to the intended use of the revenue? Explain.
5. Suppose that on a campus, girls' demand for an air freshener is P 10 - Q, and boys' demand is P = 10 - Q. The supply for the air freshener is P = 5+Q. (a) Suppose that the air freshener is a private good. Write down the combined demand of girls and boys for the air freshener. What would be the equilibrium quantity of air freshener traded? at what price? (b) Now suppose that the air freshener is a public good. Write down the combined demand of girls and boys for the air freshener. What would be the equilibrium quantity of air freshener traded? at what price?
2. Hope, Arkansas (home of both ex-President Bill Clinton and former Presidential candidate Mike Huckabee), has a subway system, for which a one-way fare is $1.50. There is pressure on Governor Huckabee to reduce the fare by one-third, to $1.00. The Governor is dismayed, thinking that this will mean Hope is losing one-third of its revenue from sales of subway tickets. The Governor's economic advisor reminds him that he is focusing only on the price effect and ignoring the quantity effect. Explain why the Governor's estimate of a one-third loss of revenue is likely to be an overestimate using elasticity of demand.
You are Brandon Johnson. The city needs money. You are contemplating 2 sources of revenue: levying a tax on gas in Chicago at $.50/ gal, and/or increasing the CTA fare $.25. The 2 demand schedules are as follows. Gas price Gallons demanded (in millions) CTA fare Number of riders (one way) (in millions) $4.50 1 $2.00 6 4.00 1.1 1.75 8 3.50 1.2 1.50 10 3.00 1.3…
Suppose that the government imposes a tax on cigarettes. Use the diagram below to answer the questions. D is the demand curve before tax, S is the supply curve before tax and ST is the supply curve after the tax. Price ST 18 12 10 8 7 3 D 10 12 Qua
Help
4. Consider the market for face masks. an d) Briefly explain whether you agree or disagree with the following statement: "Carbon emissions from cars cause breathing difficulties for people with respiratory illnesses. The total benefit to society is greatest when we completely eliminate the carbon emissions."
Answer plzz...
Ab 7 draw a supply and demand curve to show the influence of demand and supply of fuel following a rise in demand and a slight decline in supply.