Principles of Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134421315
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 2, Problem 1.3P
To determine
Is the efficiency statement right or wrong.
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Air pollution in the country of Gawanza has grown over the last ten years with an increase in manufacturing industries. The government of Gawanza now has a plan to reduce the CO2 emissions into the air by 10% per year over the next 10 years. What do you expect will happen?
The marginal cost and marginal benefits to Gawanza of reducing CO2 will be lowest in the last few years of implementing this plan.
The marginal cost and marginal benefits to Gawanza of reducing CO2 will be lowest in the last few years of implementing this plan.
The marginal cost of reducing CO2 will be the highest and marginal benefits of reducing CO2 will be the lowest in year ten.
The marginal cost of reducing CO2 will be the highest and marginal benefits of reducing CO2 will be the lowest in year ten.
The marginal cost and marginal benefits to Gawanza of reducing CO2 will be highest in the last few years of implementing this plan.
The marginal cost and marginal benefits to Gawanza of reducing…
Part 1. Imagine you have a diesel-powered car, and you can buy either diesel or biodiesel fuel (which is possible in some parts of the US). The cost of biodiesel is $38/GJ, and the biodiesel causes 22 kg CO2 emissions per GJ over its lifetime. The diesel costs $30/GJ and causes 88 kg CO2 emissions per GJ over its lifetime (4 times more!!).
Part 1: What is the cost of mitigation of choosing biodiesel?
Part 2. What carbon tax would be required to make the biodiesel cost the same as the diesel?
Emmanuel likes gardening. He grows zucchini that he sells at the local farmers' market. The table below describes the benefits and
costs Emmanuel faces as he decides how many hours to dedicate to his garden each week.
Emmanuel's Gardening Benefits and Costs
Hours
Total
Benefit
Spent
Gardening (dollars)
1
$27
2
3
4
5
6
7
51
72
90
105
117
126
Marginal
Benefit
(dollars)
Total Cost
(dollars)
$9
21
36
54
75
99
126
Marginal
Cost
(dollars)
$ MO
Instructions: Enter your answers as a whole number.
Complete the "Marginal Benefit" and "Marginal Cost" columns in the table above.
D
13
Chapter 2 Solutions
Principles of Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
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