Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter D, Problem 16RQ
Exercise D16
Why are savings, taxes, and imports referred to as “leakages” in calculating the multiplier effect?
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Just Part D please, this is for environmental economics
3. Consider a single firm that manufactures chemicals and generates pollution through its emissions E.
Researchers have estimated the MDF and MAC curves for the emissions to be the following:
MDF = 4E and MAC = 125 – E
Policymakers have decided to implement an emissions tax to control pollution. They are aware that a
constant per-unit tax of $100 is an efficient policy. Yet they are also aware that this policy is not politically
feasible because of the large tax burden it places on the firm. As a result, policymakers propose a two-
part tax:
a per unit tax of $75 for the first 15 units of emissions
an increase in the per unit tax to $100 for all further units of emissions
With an emissions tax, what is the general condition that determines how much pollution the regulated
party will emit?
What is the efficient level of emissions given the above MDF and MAC curves?
What are the firm's total tax payments under the constant $100 per-unit tax?
What is the firm's total cost of compliance…
2. Answer the following questions as they relate to a fishery:
Why is the maximum sustainable yield not necessarily the optimal sustainable yield? Does the same
intuition apply to Nathaniel's decision of when to cut his trees?
What condition will hold at the equilibrium level of fishing in an open-access fishery? Use a graph to
explain your answer, and show the level of fishing effort.
Would this same condition hold if there was only one boat in the fishery? If not, what condition will
hold, and why is it different? Use the same graph to show the single boat's level of effort.
Suppose you are given authority to solve the open-access problem in the fishery. What is the key
problem that you must address with your policy?
Chapter D Solutions
Principles of Economics 2e
Ch. D - Exercise D6 What is on the axes of an...Ch. D - Exercise D7 What does the 45-degree line show?Ch. D - Exercise D8 What determines the slope of a...Ch. D - Exercise D9 What is the marginal propensity to...Ch. D - Exercise D10 Why are the investment function, the...Ch. D - Exercise D11 Why does the import function slope...Ch. D - Exercise D12 What are the components on which the...Ch. D - Exercise D13 Is the equilibrium in a Keynesian...Ch. D - Exercise D14 What is an inflationary gap? A...Ch. D - Exercise D15 What is the multiplier effect?
Ch. D - Exercise D16 Why are savings, taxes, and imports...Ch. D - Exercise D17 Will an economy with a high...Ch. D - Exercise D18 How do economists use the multiplier?Ch. D - Exercise D19 What does it mean when the aggregate...Ch. D - Exercise D20 Which model, the AD/AS or the AE...Ch. D - Exercise D21 What are some reasons that the...Ch. D - Exercise D22 What should the government do to...Ch. D - Exercise D23 Two counties are in a recession....Ch. D - Exercise D24 Compare two policies: a tax cut on...Ch. D - Exercise D25 What role does government play in...Ch. D - Exercise D26 If there is a recessionary gap of 100...Ch. D - Exercise D27 What other changes in the economy can...
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