Suppose that each gallon of gasoline purchased causes $0.50 of external damage on society due to pollution. The WTP for a gallon of gasoline for a few people is shown in the table below and the marginal private cost and price of gasoline are both $1/gallon. Each person can only buy 1 gallon of gas. person WTP $2 $1.25 $1.01 $0.75 A В C Which people will choose to buy gas and lower social surplus in the process? [(]A () B ABCD
Suppose that each gallon of gasoline purchased causes $0.50 of external damage on society due to pollution. The WTP for a gallon of gasoline for a few people is shown in the table below and the marginal private cost and price of gasoline are both $1/gallon. Each person can only buy 1 gallon of gas. person WTP $2 $1.25 $1.01 $0.75 A В C Which people will choose to buy gas and lower social surplus in the process? [(]A () B ABCD
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 29CTQ: Suppose you want to put a dollar value on the external costs of carbon emissions from a power plant....
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