
a)
Whether an external cost or an external benefit is created when trees are planted in urban areas improve air quality and lower summer temperatures and identification of an
appropriate policy response
a)

Explanation of Solution
When trees are planted in urban areas that improve air quality and lower summer temperatures, then they impose an external benefit because the marginal
social benefit of planting trees is higher for the society as compared to an individual or private benefit to planters. Because the number of people or society as a whole can enjoy the benefit of air quality and lower temperature in hot days or summer season.
The response of the policy would be:
- The marginal external benefit is the difference between the marginal social benefit and the marginal private benefit to the tree planter.
- And Pigouvian subsidy would be similar to the marginal external benefit that may be for each plant that was planted in the urban area as it can increase the marginal private benefit to the tree planter in the same proportion of the marginal social benefit.
Introduction: Marginal private benefit is the benefit that is obtained by an individual by using an extra unit of the product. And, marginal social benefit is the benefit which is obtained by the whole society as well as the individual by producing an extra unit of a product.
Marginal private cost is the cost that is incurred by an individual by using an extra unit of the product. And, marginal
b)
Whether an external cost or an external benefit is created when water-saving toilets decrease the need to pump water from rivers and aquifers where the cost of a gallon of water to homeowners is virtually zero and identification of an appropriate policy response.
b)

Explanation of Solution
When water-saving toilets decrease the need to pump water from rivers and aquifers where the cost of a gallon of water to homeowners is virtually zero then, these toilets create an external benefit because water is much inexpensive and by replacing the traditional toilet with water-saving toilet, the whole society get the benefit of low wastage of water.
The response of the policy would be:
- The marginal external benefit is the difference between the marginal social benefit and the marginal private benefit to the homeowner.
- And a Pigouvian subsidy for installation of water saving toilets would be equal to the marginal external benefit that may bring the same amount of marginal private benefit to the homeowners and the marginal social benefit to the society.
Introduction: Marginal private benefit is the benefit that is obtained by an individual by using an extra unit of the product. And, marginal social benefit is the benefit which is obtained by the whole society as well as the individual by producing an extra unit of a product.
Marginal private cost is the cost that is incurred by an individual by using an extra unit of the product. And, marginal social cost is the expense which is incurred by the whole society due to the production of an extra unit of a product.
c)
Whether an external cost or an external benefit is created if old computer monitors contain toxic materials that pollute the environment when improperly disposed of and identification of an appropriate policy response.
c)

Explanation of Solution
If old computer monitors contain toxic materials that pollute the environment when improperly disposed of then, it imposes an external cost because the marginal private cost would be lower than the marginal social cost. The environmental pollution is borne by the whole society not only by the person who is disposing off.
The response of the policy would be:
- The marginal external benefit is the difference between the marginal social cost and the marginal private cost of the person who is disposing off.
- And Pigouvian tax for disposing the computer monitors would be equal to the marginal external cost that may bring the same amount of marginal private cost to the person who is disposing and the marginal social cost to the society.
Introduction: Marginal private benefit is the benefit that is obtained by an individual by using an extra unit of the product. And, marginal social benefit is the benefit which is obtained by the whole society as well as the individual by producing an extra unit of a product.
Marginal private cost is the cost that is incurred by an individual by using an extra unit of the product. And, marginal social cost is the expense which is incurred by the whole society due to the production of an extra unit of a product.
Chapter 75 Solutions
Krugman's Economics For The Ap® Course
- Critically analyse the five (5) characteristics of Ubuntu and provide examples of how they apply to the National Health Insurance (NHI) in South Africa.arrow_forwardCritically analyse the five (5) characteristics of Ubuntu and provide examples of how they apply to the National Health Insurance (NHI) in South Africa.arrow_forwardOutline the nine (9) consumer rights as specified in the Consumer Rights Act in South Africa.arrow_forward
- In what ways could you show the attractiveness of Philippines in the form of videos/campaigns to foreign investors? Cite 10 examples.arrow_forwardExplain the following terms and provide an example for each term: • Corruption • Fraud • Briberyarrow_forwardIn what ways could you show the attractiveness of a country in the form of videos/campaigns?arrow_forward
- With the VBS scenario in mind, debate with your own words the view that stakeholders are the primary reason why business ethics must be implemented.arrow_forwardThe unethical decisions taken by the VBS management affected the lives of many of their clients who trusted their business and services You are appointed as an ethics officer at Tyme Bank. Advise the management regarding the role of legislation in South Africa in providing the legal framework for business operations.arrow_forwardTyme Bank is a developing bank in South Africa and could potentially encounter challenges similar to those faced by VBS in the future. Explain five (5) benefits of applying business ethics at Tyme Bank to prevent similar ethical scandals.arrow_forward
- 1.3. Explain the five (5) ethical challenges that can be associated with the implementation of the National Health Insurance (NHI) in South Africa.arrow_forward1.2. Fourie (2018:211) suggests that Ubuntu emphasises the willingness to share and participate in a community. However, it does not privilege the community over the dignity and life of the individual. With the above in mind, discuss how the implementation of the National Health Insurance (NHI) is a way to uphold the concept of Ubuntu.arrow_forwardWhat are the 15 things/places/foods/culture or any strategies that could showcase the attractiveness of the Philippines to foreign investors? Use factual information in each strategies and discuss.arrow_forward
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education





