Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 16, Problem 1.2P
To determine
The effect of carbon tax on the electricity users of the two regions.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
One million plastic bottles being sold every minute is a pretty stark number showing why this is a problem, particularly when you add it to the fact that less than half are collected for recycling. Plastic has many desirable properties making it a ubiquitous material. Plastics create millions of products and on top of that millions of jobs. The plastic industry is a huge part of the world economy yet its efficiency and negative externalities are often overlooked.
You are a student of economics and you were recentlyasked to make a virtual presentation at a conference based on the article ‘Drink Bottles’.
REQUIED:
1. ‘Drink Bottles’ presents a case of market failure. Explain what is meant by market failure. Be sure to outline the sources of market failure.
Within the remote nation of New Hope, total industrial production is currently creating a constant level of GDP that results in 2,600
million tonnes per year of carbon being released into the atmosphere. The government announced three years ago that a cap on
carbon emissions of 2,430 million tonnes would be imposed. This triggered the creation of new firms that began to plant large
plantations of trees grown specifically to absorb carbon from the atmosphere and thus earn carbon credits that they would sell to the
highest bidder. See table below for the supply of these earned carbon credits available when the program begins.
Quantity of
Credits
Price of
Carbon
Credits
Created
$ 1,125
40
1,225
70
1,325
100
1,425
140
1,525
170
1,625
200
1,725
230
a. What will be the initial price for carbon credits?
Initial price $
Next, assume that new technology enables the same level of GDP to be achieved with 5 percent less carbon emissions.
b. Now what is the price of carbon credits?
Price $
Typically this kind of economic activity results in environmental harm through production and consumption externalities. When a country such as Econ Land manages to break the link between economic activity and environmental harm, it is known as ["decoupling", "uncoupling"] .
Whether Econ Land has truly broken this link or not depends on the amount of ["export pollution", "import pollution"] they are responsible for, pollution in other countries resulting from the production of products consumed in the country of Econ Land.
Chapter 16 Solutions
Principles of Economics (12th Edition)
Knowledge Booster
Similar questions
- Following section 11.8 from the textbook, in no more than 40 words and without any titles or citations, explicitly use the "excludability" and "rivalry in consumption" concepts to clarify the conditions in which Nongovernmental Organizations (NGOs) are usually not comparatively disadvantaged. Following section 11.8 from the textbook, in no more than 40 words and without any titles or citations, explicitly use the "excludability" and "rivalry in consumption" concepts to clarify the conditions in which Nongovernmental Organizations (NGOs) are usually not comparatively disadvantaged.arrow_forwardWhich of the following statements about global warming, according to Lomborg, is true? The increase in global temperature will cost the world $14.5 trillion by 2100, but following Kyoto Protocols will cost $15.8 trillion. The increase in global temperature will cost the world $15.8 trillion, but following Kyoto Protocols will cost $14.5 trillion. Reducing carbon emissions is the least expensive way to curb global warming. Following the Kyoto Protocols solves the temperature warming problem most economically. O 00 Oarrow_forwardName two countries, other than Canada, that are globally important sources of forest products. What natural characteristics do Canada and these countries share?arrow_forward
- Prior to 2020, the world was becoming more integrated. Supply chains traversed national borders and oceans without much hinderance. The spread of a viral pandemic may have altered these supply chains and interdependencies for foreseeable future. How can the topic of open economies be used to predict the effects of COVID-19 on international trade.arrow_forwarda) Briefly explain the difference between a trade secret and a patent.b) Why might one prefer a trade secret to a patent?c) Are trade secrets and patents socially efficient? Explain.arrow_forwardIn an attempt to bring equity to the climate change agreement, the Framework Convention on Climate Change incorporated the concept of common but differentiated responsibilities, which suggested what? Select all that apply: a. developing countries may need to hinder their growth in order to meet emission reduction goals b. responsibility for reducing emissions should be placed on large corporations rather than countries c. all countries should be responsible for the same percentage of emission reductions d. the richest countries of the world should cut emissions prior to developing countries e. countries that have contributed more to overall emissions should be responsible for more reductionsarrow_forward
- According to data from the UN Food and Agriculture Organization, which of the following nations had the fastest growing area of forested land in the period 2010–2015? Multiple Choice United States Nigeria Brazil Icelandarrow_forwardMAC = 50 - 5E. The government offers a $30 per-unit subsidy for abatement. In principle, the firm could ignore the subsidy and continue to emit as many emissions as it was in the absence of government intervention, but there is money to be made from cutting back its emissions. Compared to ignoring the subsidy, how much money could a cost-minimizing firm save or make by cutting back its emissions?arrow_forwardSuppose a small country, Country X, is considering implementing a Carbon Tax to address environmental concerns and reduce carbon emissions. The government believes that such a tax will have an impact on the country's economic performance. Given the following data: Current annual carbon emissions: 500,000 metric tons The government proposes a carbon tax of $30 per metric ton of carbon emitted. Calculate the potential change in annual carbon tax revenue if the country successfully reduces its carbon emissions by 20% after the implementation of the Carbon Tax.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
