Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Textbook Question
Chapter 17, Problem 6P
(External Costs with Variable Technology) Think of an industry that pollutes the water and has access to variable technology for reducing that pollution. Graphically illustrate and explain the impact of each of the following, other things constant, on the optimal level of water quality:
a. New evidence is discovered about a greater risk of cancer from water pollution.
b. The cost of pollution-control equipment increases.
c. A technological improvement reduces the cost of pollution control.
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Question 26
Consider two ways to reduce pollution--establishment of taxes on the pollution or the sale of permits to polluters. Which of the following best describes the outcome?
a
Both methods can result in the same reduction of pollution, but the permits may achieve that goal with lower administrative costs.
b
Both methods can result in the same reduction of pollution, but the permits may achieve that goal with higher administrative costs.
c
The permits will allow more pollution, but both methods will have the same administrative costs.
d
Both methods can result in the same reduction of pollution and the same adminstrative costs.
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