2$10983T.3518YDe2236349251374 EmissionsConsider the figure above. If the government imposes a tax of $18 per unit of emissions, then what areas represent the governmentrevenue?If Maria's option value to save the Bald Eagle is $143, her willingness to pay is $536, and the non-use value is $139, what would be Maria'suse value to save the Bald Eagle?Suppose the cost of flying a 200-seat plane for an airline is $100,000 and there are 10 empty seats on a flight. If the marginal cost offlying a passenger is $200 and a standby passenger is willing to pay $300, the airline shouldOa. not sell the ticket because the marginal benefit is less than the average cost.Ob. sell the ticket because the marginal benefit exceeds the average cost.C sell the ticket because the marginal benefit exceeds the marginal cost.d. not sell the ticket because the marginal benefit is less than the marginal cost. PriceSMCEPMCRBDemandQuantityRefer to the graph above. What area(s) represent(s) the victim's suffering if pollution permits (given for free to the firms) areimplemented to fix the externality?PriceSMCP1PsPMCP2M.P.DemandQ2→ QuantityQsRefer to the graph above. What area(s) represent(s) the victim's suffering if pollution permits (given for free to the firms) areimplemented to fix the externality?

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T. 35 18 Y D. 223 634 925 1374 Emissions Consider the figure above. If the government imposes a tax of $18 per unit of emissions, then what areas represent the government revenue?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3. The effect of negative externalities on the optimal quantityof consumption Consider the market for paper. Suppose that a paper factory dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the factory. Producing an additional ton of paper imposes a constant external cost of $450 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for paper. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $450 per ton, 1500 PRICE (Dollars per ton of paper) 1350 1200 1050 900 750 600 450 300 150 0 D O QUANTITY (Tons of paper) Supply (Private Cost) The market equilibrium quantity is Demand (Private Value) Social Cost tons of paper, but the socially optimal quantity of paper production is To create an incentive for the firm to produce the socially optimal quantity of paper, the government could impose a of paper. tons. per ton
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