9. Private solutions to correct for externalitiesConsider the following scenario:Suppose that a chicken farm uses a nearby stream to dispose of the wastes released by its chickens. These wastes flow downstreaminto a lake that has become thick with algae and polluted by the minerals in the waste matter. The local office of a nonprofitenvironmental organization collects enough donations to fund a campaign to stop the farm's pollution.Which of the following types of private solutions to the externality of pollution has occurred in this case?O ContractsO Moral codes and social sanctionsO CharitiesO Integration of different types of businesses through merger or acquisitionIt's important to note that sometimes private solutions to externalities do not work. For example, this occurs when one party repeatedly holds out fora better deal. This describes the problem of

A non-profit organization is a gathering coordinated for purposes other than creating profit and in…

pse that a chicken farm uses a nearby stream to dispose of the wastes released by its chickens. These wastes flow downstream lake that has become thick with algae and polluted by the minerals in the waste matter. The local office of a nonprofit onmental organization collects enough donations to fund a campaign to stop the farm's pollution. che following types of private solutions to the externality of pollution has occurred in this case? Contracts Moral codes and social sanctions Charities Integration of different types of businesses through merger or acquisition cant to note that sometimes private solutions to externalities do not work. For example, this occurs when one party repeatedly holds out for

pse that a chicken farm uses a nearby stream to dispose of the wastes released by its chickens. These wastes flow downstream lake that has become thick with algae and polluted by the minerals in the waste matter. The local office of a nonprofit onmental organization collects enough donations to fund a campaign to stop the farm's pollution. che following types of private solutions to the externality of pollution has occurred in this case? Contracts Moral codes and social sanctions Charities Integration of different types of businesses through merger or acquisition cant to note that sometimes private solutions to externalities do not work. For example, this occurs when one party repeatedly holds out for

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Public Goods And Common Resources

Section: Chapter Questions

Problem 2PA

See similar textbooks

Similar questions

How can high-income countries benefit from covering much of the cost of reducing pollution created by low-income countries?
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?
Identify the following situations as an example of a negative or a positive externality: You are a birder (bird watcher), and your neighbor has put up several birdhouses in the yard as well as planting trees and flowers that attract birds. Your neighbor paints his house a hideous color. Investments in private education raise your countrys standard of living. Trash dumped upstream flows downstream right past your home. Your roommate is a smoker, but you are a nonsmoker.
Table 12.12, shows the supply and demand conditions for a firm that will play trumpets on the streets when requested. QS1 is the quantity supplied without social costs. QS2 is the quantity supplied with social costs. What is the negative externality in this situation? Identify the equilibrium price and quantity when we account only for private costs, and then when we account for social costs. How does accounting for the externality affect the equilibrium price and quantity?
(Negative Externalities) Suppose you wish to reduce a negative externality by imposing a tax on the activity that creates that externality. When the amount of the externality produced per unit of output increases as output increases, the correct tax can be determined by using a demand-supply diagram; show this. Assume that the marginal private cost curve slopes upward. Negative Externalities: The Market for Electricity in the Midwest:
A city currently emits 15 million gallons (MG) of raw sewage into a lake that is beside the city. Table 12.13 shows the total costs (TC) in thousands of dollars of cleaning up the sewage to different levels, together with the total benefits (TB) of doing so. Benefits include environmental, recreational, health, and industrial benefits. Using the information in Table 12.13 calculate the marginal costs and marginal benefits of reducing sewage emissions for this City. What is the optimal level of sewage for this city? How can you tell?
An emissions tax on a quantity of emissions from a film is not a command-and-control approach to reducing pollution. Why?
Classify the following pollution-control policies as command-and-control or market incentive based. A state emissions tax on the quantity of carbon emitted by each firm. The federal government requires domestic auto companies to improve car emissions by 2020. The EPA sets national standards for water quality. A city sells permits to films that allow them to emit a specified quantity of pollution. The federal government pays fishermen to preserve salmon.
Suppose that Sonys R. Is this a private or social benefit?
Show the market for cigarettes in equilibrium, assuming that there are no laws banning smoking in public. Label the equilibrium private market price and quantity as Pm and Qm. Add whatever is needed to the model to show the impact of the negative externality from second-hand smoking. (Hint: In this case it is the consumers, not the sellers, who are creating the negative externality.) Label the social optimal output and price as Fe and Qe. On the graph, shade in the deadweight loss at the market output.