Firm US Steel 1 ton of pollution 2 tons of pollution 3 tons of pollution 140.00 380.00 760.00 Ford 220.00 840.00 1145.00 Apple 1295.00 1505.00 1925.00 Suppose the government gives every firm enough permits so that, without trade, every firm must clean two units of pollution. What will the cost be to every firm, and the cost to clean 6 units of pollution? The market price for a permit is $1400. Net Cost for US Steel = $ Net Cost for Ford = $ Net Cost for Apple = $ Societal cost to clean = $

Firm US Steel 1 ton of pollution 2 tons of pollution 3 tons of pollution 140.00 380.00 760.00 Ford 220.00 840.00 1145.00 Apple 1295.00 1505.00 1925.00 Suppose the government gives every firm enough permits so that, without trade, every firm must clean two units of pollution. What will the cost be to every firm, and the cost to clean 6 units of pollution? The market price for a permit is $1400. Net Cost for US Steel = $ Net Cost for Ford = $ Net Cost for Apple = $ Societal cost to clean = $

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 44P: In the Land of Purity, there is only one form of pollution, called gunk. Table 12.14 shows possible...

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Similar questions

How can high-income countries benefit from covering much of the cost of reducing pollution created by low-income countries?
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?
Consider the case of global environmental problems that spill across international borders as a prisoners dilemma of the sort studied in Monopolistic Competition and Oligopoly. Say that there are two countries, A and B. Each country can cheese whether to protect the environment, at a cost of 10, or not to protect it, at a cost of zero. If one country decides to protect the environment, there is a benefit of 16, but the benefit is divided equally between the two countries. If both countries decide to protect the environment, there is a benefit of 32, which is divided equally between the two centuries. In Table 12.10, fill in the costs, benefits, and total payoffs to the countries of the following decisions. Explain why, without some international agreement, they are likely to end up with neither country acting to protect the environment.
As the extent of environmental protection expands, would you expect the marginal benefits of environmental protection to rise or fall? Why or why not?
Is zero pollution possible under a marketable permits system? Why or why not?
The rows in Table 12.7 show three market-oriented tools for reducing pollution. The columns of the table show three complaints about command-and-control regulation. Fill in the table by stating briefly how each market-oriented tool addresses each of the three concerns.
Will a system of marketable permits work with thousands of films? Why or why not?
Would environmentalists favor command-and-control policies as a way to reduce pollution? Why or why not?
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?
Suppose you want to put a dollar value on the external costs of carbon emissions from a power plant. What information or data would you obtain to measure the external [not social] cost?
What is a pollution charge and what incentive does it provide for a firm to take external costs into account?
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?