MAC of reducing SO2 emissionTons of SO2Firm 1Firm 2Firm 31st322nd1264Зrd1896.4th241285th3015106th361812The table shows the marginal abatement costs of reducing SO2 pollution. Each firm is emitting 6 tons of SO2 into the aircurrently.QUESTION 3Suppose the government doesn't know each firm's costs of abatement. The socially efficient or least cost ofreducing the pollution from 18 tons to 6 tons can be brought about by a per-unit SO2 tax ofO 13O 4O 78

The marginal abatement cost helps in measuring the cost of reduction of one more unit of pollution.…

Suppose the government doesn't know each firm's costs of abatement. The socially efficient or least cost of reducing the pollution from 18 tons to 6 tons can be brought about by a per-unit SO2 tax of O 13 O 4 O 8

Suppose the government doesn't know each firm's costs of abatement. The socially efficient or least cost of reducing the pollution from 18 tons to 6 tons can be brought about by a per-unit SO2 tax of O 13 O 4 O 8

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: The Coase theorem states that Select one: O A. property rights are social arrangements governing…

A: Externalities lead to the inefficient outcomes. Externalities could be negative or positive. The…

Q: If the sanction (punishment) is 4 years, what is the total social cost of jailing criminals (number…

A: Social costs are the sum of private costs and any other external costs to society arising from the…

Q: Under which of the following conditions will the private market be able to overcome the problem of…

A: Note:- Since we can only answer one question at a time, we'll answer the first one. Please repost…

Q: O c. $7. d. $38. Quantity Private Value Private Cost External Cost (Units) (Dollars) (Dollars)…

A: Social cost in economics refers to the total cost borne by society as a result of a particular…

Q: Table 10-1 Quantity (Units) 1 2 3 4 5 6 7 OOOC $2 $3 $9 Private Value O $10 (Dollars) 14 13 12 11 10…

A: The output level that represents all of the transaction's costs and benefits, or the equilibrium…

Q: Suppose that you are an economic-policy advisor. Environmental groups are pressuring you toimplement…

A: Externalities: It is an important concept of the economics. It is basically the cost caused by the…

Q: Refer to Figure 11-1. If the external cost of producing the good is not taken into account, what is…

A: Externalities: When a firm produces a good, sometimes it creates costs or benefits for other firms.…

Q: The marginal social cost is equal to marginal private cost + demand marginal external cost +…

A: Externality is an economic term that is used to indicate the expenditure related or benefits…

Q: A local restaurant attracts a large crowd for lunch. However, its customers park their cars on the…

A: The socially optimal level of output is that output which maximizes the overall social welfare. The…

Q: Choose a wrong statement about uniformly mixed fund pollutants. The damage caused by uniformly mixed…

A: In the market, the pollution is one of the greatest negative externality produced by the firms for…

Q: Refer to Table 10-3. The socially optimal quantity of output is O a. 5 units. O b. 6 units. O c. 4…

A: External benefit is the spillover positive effect of an economic activity on society.

Q: Price 60 MSC 50 40 MPC 30 20 10 MPB-MSB 10 15 30 20 25 1,000s of tickets Suppose a printing company…

A: When the printing company dumps waste products in the river, it generates negative externality to…

Q: Carbon dioxide emissions have been linked to worsening climate conditions. The following table lists…

A: Public policies refer to a course of action taken by the government or other organizations to solve…

Q: A positive externality exists when O marginal social costs are less than marginal private costs. O…

A: Positive externalities are beneficial side effects arise from the production or consumption of…

Q: АТС P2 P3 P4 P5 Demand MR G P6 Q Q2 Q3 d. Between what two points is Steverail's demand curve…

A: The monopolist is the single sellers of unique and patented good or service which has no close…

Q: Suppose there is a public good, this good would add 50 dollars in benefit to each of the 1000 people…

A: A good's per consumer benefit is 50 and there are 1000 consumer.

Q: P₁ Pa O 0.5 (P3-P2) (Q0-Q1) O 0.5 (P3-P1) (Q0-Q1) 0.5 (P2-P1) (Q0-Q1) (P3-P1) (Q0-Q1) Q₁0 Social…

A: Dead weight loss is defined as the loss of total welfare (or the total surplus = consumer surplus +…

Q: Suppose the government has determined that the socially optimal quantity of chemical pollution is…

Q: $4.00 Marginal Cost (per ton) of pollution reductionton $3.00 $2.00 $1.00 O a). $1.10 Ob). $0.90…

A: we are given with the graph, On x axis we have the pollution reduction and on y axis we have…

Q: Marginal social cost, marginal social benefit $25 22 20 17 15 12 10 7 52 MSC X MSB 1 L 35 40 45 50…

A: Social optimal quantity refers to that level of quantity which maximises total or overall welfare…

Q: An externality exists when Othere are internal costs. O there are private costs. O there are…

A: An externality is a crucial concept in economics that arises when economic transactions generate…

Q: 24 22 18 16 Price 120 160 O 120 units O 40 units O0 units O160 units Social cost (pavate cost and…

A: Negative externality is a situation when the operation of one party creates a negative effect on the…

Q: Consider the market for electric cars. Suppose that a electric car manufacturing facility dumps…

A: This can be defined as a concept that shows the cost incurred in the production process of a…

Q: ivate marginal cost and MB represents private marginal benefit. ssume there are two types of firms…

A: In the presence of a positive externality, allocative efficiency occurs at the following point. MC =…

Q: Use this information to answer questions 1-3 Price $ 3000 2900 2700 ο ο ο 2600 Question 1 200 O 325…

A: The equilibrium rate of output is the output level at which marginal benefit is equal to marginal…

Q: Suppose the local authorities wanted to achieve a more drastic reduction in total pollu- tion of 75…

A: Let us assume , Marginal abatement cost of firm 1 be = c1 Marginal abatement cost of firm 1 be =…

Q: Without government intervention, a negative externality will lead to: OA. a decrease in a firm's…

A: A negative externality is a market failure that happens when the production or consumption of a…

Q: 5) Consider a remote village with a limited, freely available water supply and no government…

A: Marginal Cost:Marginal cost is the additional cost incurred by producing one more unit of a good or…

Q: The graph shows the marginal social cost, supply, and demand curves in the hand sanitizer market. At…

A: As the social cost is higher than the private cost i.e. at the point where demand = supply. The…

Q: Figure 4 PRICE (Dollars per unit) 9:00 6.21 4.50 Social Cost Supply 48.60 76 100 QUANTITY (Units of…

A: The production of certain materials generates a negative influence on the market. This is termed as…

Q: If a good is exchanged between buyers and sellers without consideration of external costs OA. the…

A: External costs can be defined as when producing or consuming of goods have negative impact on the…

Q: Question 4 Price (dollars per widget) O 8 10 A N 10 $6. 60 20 30 40 50 Quantity (millions of widgets…

A: In the free market, the equilibrium price and quantity is determined by the forces of demand and…

Q: The robot factory is situated next to a dormitory for nurses who work night shifts. The production…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Suppose electricity generates a negative externality in production. If so, then A. the marginal…

A: In an economy, negative externality refers to the adverse impact of an individual's action on the…

Q: The market equilibrium quantity is units of electricity, but the socially optimal quantity of…

A: The market equilibrium quantity can be identified from the graph where the demand and supply curves…

Q: Refer to Figure 10-11. Which of the following statements is correct? O a. The private value of the…

A: Externalities are the unrepresented costs and benefits that an individual fails to report from an…

Q: 48 28 20 MB MB MBM Tax per peson 9. 12 28 per ace Acres of park Consider an election with three…

A: The median voter theorem holds that when voters and policies get distributed along a one-dimensional…

Q: What advantages and disadvantages do you see in using acap-and-trade system to reduce greenhouse gas…

A: Emissions trading, also known as "cap and trade," is a low-cost method of lowering greenhouse gas…

Q: cost at output level: Select one: a. 7 b. 3 c. 6 d. 4 Price (S) 14- 12 10-

A: Marginal cost refers to the addition to the total cost when one more additional unit of input…

Q: The diagram below shows the marginal costs of pollution abatement for two firms, Firm 1 and Firm 2.…

A: An Emission Abatement Tax, also known as an Environmental Tax or Pigouvian Tax, is a type of…

Q: Suppose the equation for the demand curve in a market is P=100 – 20. Also, suppose the equation for…

A: At market equilibrium, Demand is equal to supply. At socially optimal equilibrium, social demand is…

Q: Which statement about externalities is wrong? O Markets are typically not efficient in dealing with…

A: An externality, in economics, refers to an indirect cost or benefit experienced by a third party…

Q: Refer to the above supply and demand graph of Product X. Q, Quantity of Product X What would happen…

A: Equilibrium is achieved where demand and supply curve intersect each other. Hence if the government…

Q: All of the following statements about taxes on emissions and subsidies to abatement are true except:…

A: Taxes on emmissions and subsidies to abatement does not necessarily achieve socially efficient…

Q: 5. Suppose that Capsule Corporation and Red Ribbon Company are producers of spaceships. In their…

A: a) If Red Ribbon Company sells 10 permits to Capsule Corporation at $40, the total cost of reducing…

Q: PRICE 63 36 24 15 240 QUANTITY 420 Supply Social Value Demand Refer to Figure 10-5. The socially…

A: The socially optimal quantity refers to the level of production or consumption of a good or service…

Question

MAC of reducing SO2 emission
Tons of SO2
Firm 1
Firm 2
Firm 3
1st
3
2
2nd
12
6
4
Зrd
18
9
6.
4th
24
12
8
5th
30
15
10
6th
36
18
12
The table shows the marginal abatement costs of reducing SO2 pollution. Each firm is emitting 6 tons of SO2 into the air
currently.
QUESTION 3
Suppose the government doesn't know each firm's costs of abatement. The socially efficient or least cost of
reducing the pollution from 18 tons to 6 tons can be brought about by a per-unit SO2 tax of
O 13
O 4
O 7
8

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Under conditions of the Coase Theorem, whether one or the other of two parties to a conflict over air-pollution externalities holds the property rights will affect O the efficiency of a negotiated solution the amount and method of pollution reduction to be used O who must compensate whom O who will make the initial offer in negotiations
Suppose the equation for the demand curve in a market is P=100 – 2Q. Also, suppose the equation for the supply curve in the same market is P=10+3Q. Suppose there is an external cost of $20 associated with the production of each unit of the good. The socially optimal quantity is O 4 units smaller than the market equilibrium quantity. O 22 units greater than the market equilibrium quantity O 14 units smaller than the market equilibrium quantity O 4 units greater than the market equilibrium quantity.
4 An increase in per capita production and incomes can be expected to have a large effect in reducing emissions that lead to global warming. O false O true
QUESTION 10 Suppose that a firm in a competitive market produces electricity by burning coal. The production process creates a negative externality of air pollution. The firm only cares about its private benefits and costs so it will produce a quantity where O the price of electricity it is paid equals the marginal private cost of producing electricity O the marginal value of electricity to society equals the marginal social cost to society the cost of the externality is maximized O the transaction costs of private bargaining are minimized
possible Submit c The figure on the right shows the costs and benefits associated with wood pulp production. Without regulation the market will produce a price of Price (dollars per ton) tons of wood pulp at per ton. 1,100 MSC O A. 5; $700 1,000 O B. 3; $600 900 O C. 5; $1,100 800 O D. 3; $900 S=MC O E. 4; $900 700 600 D=MB 500 2 4. 4 Quantity (tons per week) Next
The many identical residents of some cities love drinking apple juice. The cost of producing a bottle of apple juice is $5, and the competitive suppliers sell it at this price. Each resident has the following willingness to pay for the tasty refreshment: Quantity Willingness to Pay (Dollars) First bottle 10 Second bottle 8 Third bottle 6. Fourth bottle 4 Fifth bottle 2 Further bottles
Lighthouses are a good that is non-excludable and non-rival (i.e. a Public Good). Given there are currently 2 boats in the area and the marginal cost shown in gray. What is the Socially Optimal level of Lighthouses? 02 49 3 O t 05 Price ($) $80- $70- $60- $50 $40 $30- $20- $10- 0 0 Lighthouse Market 2 3 Lighthouses, QL Marginal Cost 5 MBA MBB 6
PRICE 20 18 16 14 12 10 8 6 4 2 Figure 10-3 Social Value Supply Demand, 2 4 6 8 10 12 14 16 18 20 QUANTITY Refer to Figure 10-3. If the government wanted to tax or subsidize this good to achieve the socially optimal level of output, it would O a. introduce a subsidy of $4 per unit. O b. impose a tax of $4 per unit. O c. impose a tax of $2 per unit. O d. introduce a subsidy of $2 per unit.
IMPORTANT: ENTER DWL AS A POSITIVE NUMBER. The marginal private benefit (MPB) a firm receives for each of up to 8 tons of pollution is given in the table. It does not incur any marginal cost for any ton it emits, and rationally chooses how many of these 8 tons to emit. Each ton emitted imposes a societal cost of $53. MPB of each possible ton of pollution. 1 2 3 4 5 6 7 8 MPB $76 $63 $42 $24 $9 $0 $0 $0] Assume a perfectly competitive market for tradable pollution permits, where each permit allows a firm to emit one ton of pollution. The firm currently has 6 pollution permits. If the market price for a pollution permit is $31.50, how many tons does the firm emit?
An externality occurs whenever O private costs plus internal costs equal social costs. private costs diverge from social costs. O private costs are the same as internal costs. O private costs are the same as social costs.
Question 1 Price $1.90 1.80 1.70- 1.60 1.50 1.35 35 38 42 Supply (Private+ Public Costs) 58 Supply (Private Costs) Quantity Refer to the figure above. This graph represents the tobacco industry. The socially optimal price and quantity are O $1.90 and 38 units, respectively. O $1.80 and 35 units, respectively. O $1.60 and 42 units, respectively. O $1.35 and 58 units, respectively.
6. Correcting for negative externalities - Taxes versus tradable permits Paper factories emit chemicals as a waste product. This generates a cost to society that is not paid for by the firm; therefore, pollution is a negative externality of paper production. Suppose the U.S. government wants to correct this market failure by getting firms to internalize the cost of pollution. To do this, the government can charge firms for pollution rights (the right to emit a given quantity of chemicals). The following graph shows the daily demand for pollution rights. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per ton) 50 45 40 35 30 25 20 15 10 5 0 0 Demand 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of tons) Graph Input Tool Daily Demand for Pollution…