What do you understand by externalities? Why do they have to be addressed for sustaining economic activity or human wellbeing? A private or a market mediated approach to address externalities may not always be adequate in resolving the issue, therefore a recourse to public sector solutions is inevitable? Give suitable examples in elaborating your answer

What do you understand by externalities? Why do they have to be addressed for sustaining economic activity or human wellbeing? A private or a market mediated approach to address externalities may not always be adequate in resolving the issue, therefore a recourse to public sector solutions is inevitable? Give suitable examples in elaborating your answer

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter17: Externalities And The Environment

Section: Chapter Questions

Problem 13PAE

See similar textbooks

Similar questions

Consider an economy which is heavily dependent on tourism. To boost tourist revenue, the government has decided to reclaim the sea to build a theme park at the coastal area. This has resulted in sea pollution, reduces the fish stock and threaten the livelihoods of fishermen in the vicinity. (a)Describe the type of externality exist in the scenario. Explain with a suitable diagram and highlight the area of the efficiency loss. (b)Explain the remedial action to rectify the externality problem.
Free-market environmentalism has the potential to improve environmental outcomes A. Because it forces individuals to cooperate with each other toward a common goal B. Because it relies on already existing markets to address environmental issues, thereby reducing transaction costs C. Because it recognizes the importance of aligning incentives of stakeholders D. Because it rejects the constraints of the Coase Theorem E. Because its goal is to maximize corporate wealth, which promotes environmentalism and improves environmental outcomes
What are the essential characteristics of public goods? Why might it be difficult for private sector to supply public goods? Please discuss.
Correct answer with explan in minimum 300 words
Assume the existence of a negative externality. Compared to the socially efficient solution, an unregulated market will result in: · Too little production Too much production C. Just the right amount of production Abatement costs that are equal to the damages
Individuals go for flu injection not only protect themselves against flu but also help to prevent the disease from spreading in the community. (a) What type of externality occurs in the flu injection market? (b) Is the market outcome efficient? (c) What can the government do to rectify the externality issue?
How can the benefit-cost analyses attempt to determine whether thesocial benefits of a proposed public activity outweigh the social costs?
(a) Explain the difference between a positive externality and a negative externality and why each result in an equilibrium point that is not optimal for society. (b) which externality results in an equilibrium quantity that is higher than the optimal social quantity of a good? (c) how can the impact of the externality in part b be corrected?
P#1 If a market situation arises where the externality is so dangerous in even small quantities, which of the following strategies would be the most efficient? a government controlled effluent standard Flexible emission standard. pollution tax. tradable permits.
These two situations have arisen: Agricultural technologies become available that if used reduce adverse effects fromfarming on environmental quality Water from a uranium mine is leaking into Kakadu NationalPark For each case you are to identify possible external effects that might occur and explain the conditions that would need to exist, and what the government or the affected parties could do, to change these negative situations for the betterment of one or both parties?
Market-based environmental policy instruments (e.g., carbon tax or tradeable permits) arecentral to national strategies aiming to mitigate environmental degradation. Choose carbon tax as your market-based environmental policy instrument.ii. Provide a formal (algebraic) evaluation of carbon tax's cost-effectiveness.
(a) Explain what is meant by command-and-control in terms of a demand side climate change policy. What are the pros and cons of this as a poliey option? (b) Using a diagram, explain how a carbon tax could help reduce pollution. (c) Using a diagram or diagrams, explain how a cap-and-trade scheme could result in pollution reduction.