Suppose the government decides to give each ferry line 50 tradable permits. Each permitallows a ferry line to produce one unit of pollution.c. The firm that values the permits most is [ Select ]The firm that would place the lowest value on its permits is[ Select ]d. When the ferry lines trade permits, the firm which values them the most will buy from thefirm that values them the least. With this in mind, which firm will sell permits and which willbuy? How many permits will be bought/sold?Firm A will [ Select ]Firm B will [ Select ]Firm C will[ Select ] Problem 3: Tradable PermitsThere are three major ferry lines operating on the East River, each generating 100 units ofpollution per year. The ferry lines face the costs of reducing pollution that are shown in thetable below.Cost of reducing pollution by1 unit$1,500$2,500$1,800Ferry lineВThe government has decided it wants to reduce pollution levels by 50 percent and requireseach ferry line to cut its pollution in half.a. Determine the cost of pollution reduction for each ferry line.Ferry LineTotal cost of cutting pollution in halfА2$В2$C2$b. What is the total cost of pollution reduction?2$ABC

There are three major ferry lines operating on the East River, each generating 100 units of pollution per year. The ferry lines face the costs of reducing pollution that are shown in the table below. Cost of reducing pollution by 1 unit $1,500 $2,500 $1,800 Ferry line В The government has decided it wants to reduce pollution levels by 50 percent and requires each ferry line to cut its pollution in half. a. Determine the cost of pollution reduction for each ferry line. Ferry Line Total cost of cutting pollution in half A 2$ 2$ C 2$ b. What is the total cost of pollution reduction? 2$ ABC

There are three major ferry lines operating on the East River, each generating 100 units of pollution per year. The ferry lines face the costs of reducing pollution that are shown in the table below. Cost of reducing pollution by 1 unit $1,500 $2,500 $1,800 Ferry line В The government has decided it wants to reduce pollution levels by 50 percent and requires each ferry line to cut its pollution in half. a. Determine the cost of pollution reduction for each ferry line. Ferry Line Total cost of cutting pollution in half A 2$ 2$ C 2$ b. What is the total cost of pollution reduction? 2$ ABC

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 4SCQ: Table 12.5 provides the supply and demand conditions for a manufacturing film. The third column...

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Similar questions

What is a pollution charge and what incentive does it provide for a firm to take external costs into account?
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?
As the extent of environmental protection expands, would you expect the marginal benefits of environmental protection to rise or fall? Why or why not?
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?
Assume that the marginal private costs of a film producing fuel-efficient can; is greater than the marginal social costs. Assume that the marginal private benefits of a firm producing fuel efficient cars are the same as the marginal social benefits. Discuss one wags.r that the government cans ï¬‚y to increase production and sales of fuel efficient cars to the socially desirable amount. Hint: the government is flying to affect production through costs, net benefits.
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?
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?
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.
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?
As the extent of environmental protection expands, would you expect marginal costs of environmental protection to rise or fall? Why or why not?
Is zero pollution an optimal goal? Way or why not?