Topic 3 DQ 1

In Unit 5, you are learning about negative externalities and environmental protection. One activity that qualifies for negative externalities is the poaching of animals in several countries throughout the world. You will analyze the topics of negative externalities and environmental protection by completing the learning journal. 1. Choose one of the approaches listed below on protecting elephants from poachers in African countries.   A. The government sets up enormous national parks that have sufficient habitat for elephants to thrive and forbids all local people to enter the parks or to injure either the elephants or their habitat in any way.  B. The government sets up national parks and designates ten villages around the park's edges as official tourist centers that become places where tourists can stay and bases for guided tours inside the national park.  2. Depending on the approach you have chosen (A or B), explain how the incentives will affect the local villagers, who are…

1. If you were to graph a measure of pollution on one axis and a level of economic activity (such as the real gross domestic product per person) on the other, what type of relationship do you think you would find? How would you explain this relationship? 2. Think of an externality that arises in a college dorm. What market can you think of that would (or could) eliminate any inefficiencies from that externality?  

A city currently emits 16 million gallons (MG) of raw sewage into a lake that is beside the city. Table 12.13 shows the total costs (TC) in thousands of dollars of cleaning up the sewage to different levels, together with the total benefits (TB) of doing so. Benefits include environmental, recreational, health, and industrial benefits.   TC TB 16 MG Current Current 12 MG 50 800 8 MG 150 1300 4 MG 500 1850 0 MG 1200 2000 Table 12.13 Using the information in Table 12.13 calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. What is the optimal level of sewage for this city? How can you tell?

A city currently emits 16 million gallons (MG) of raw sewage into a lake that is beside the city. The table below shows the total costs (TC) in thousands of dollars of cleaning up the sewage to different levels, together with the total benefits (TB) of doing so. Benefits include environmental, recreational, health, and industrial benefits. Emissions Total Cost Marginal Cost Total Benefit Marginal Benefit 16 MG Current N/A Current N/A 12 MG 50   800   8 MG 150   1300   4 MG 500   1650   0 MG 1200   1950   Complete the table. What is the optimal level of sewage for this city? How can you tell?

3:01 2. Indicate whether the following activities create a positive or negative externality: a. Late-night road construction begins on a new bridge. As a consequence, traffic is rerouted past your house while the construction takes place. b. An excavating company pollutes a local stream with acid rock. c. A homeowner whose property backs up on a city park enjoys the sound of kids playing soccer. d. A student uses her cell phone discreetly during class. e. You and your friends volunteer to plant wildflowers along the local highway. ← + 8

ЕOC 11.04 Consider two car factories, one run by Ford and the other run by Honda, that both create pollution. The government wants to reduce how much these two factories pollute by 40 tons, so only allow factories to pollute if they have a permit. Each factory is given 20 pollution permits. A business can use a permit to emit one ton of pollution or they can sell it to another business (and lose the ability to pollute). To lower pollution it costs Ford $200 per ton of pollutant removed and it costs Honda $100 per ton removed. After Ford and Honda have met to trade their permits with each other, what we expect to happen? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. Honda emits 20 tons of pollutants and Ford emits 20 tons of pollutants. a Honda no longer pollutes and Ford does not lower how much it produces. Honda increases its pollution and Ford lowers its pollution. Ford no longer pollutes and Honda does not lower how much it…

The market for a particular chemical, called Dexzon, is described by the following equations: • Demand: QD = 100 – 5P • Supply: QS = 5P where Q is measured in ounces of Dexzon and P is price in dollars per ounce. For each ounce of Dexzon produced, 1 unit of pollution is released into the environment. The external cost of the pollution is estimated to be $4 per ounce of Dexzon produced. a) Draw a diagram to illustrate the market for Dexzon described above. On your diagram, clearly indicate the market equilibrium, the efficient equilibrium and the price and quantity at each of these equilibria. b) On your diagram in a), shade the area that corresponds to the deadweight loss. c) Compute consumer surplus, producer surplus and total surplus both in the market equilibrium and in the efficient equilibrium. What is the size of the deadweight loss?

Externalities and Public Goods: End of Chapter Problems 11. The Presidio, previously a military base in San Francisco, is now a national park. It sits in the middle of San Francisco on some of the most valuable real estate in the United States. Congress, when it created the park, required that it rehabilitate the aging buildings and be self-sufficient within a decade, or the land would be sold off to developers. The park then leased the land to private firms-Lucas Films has built a large digital animation studio, while other firms have undertaken similar projects. These projects all must maintain the general character of the park and generate rent that will cover the park's expenses in the future. Is this privatization approach likely to work in most of America's other national parks? It probably would, because the value of land in most other national parks is equivalent to that of the Presidio, would not, because the value of land in most other national parks exceeds that of the…

8.1 Suppose we have an agricultural valley 100 km by 50 km, with a polluting electricity power plant. The power plant causes pollution problems in a narrow strip of land downwind of the plant, and within this valley. 10 km in length and 500 m in width, but no problems outside of that area. The total effect of the pollution is to make crop land less productive. If we were to clean up the pollution, would we expect land prices to increase? Where? Would we expect wages to decline? Would the changes in land prices and/or wages fully reflect the benefits of cleaning up the pollution? Why or why not?

Economists define the efficient amount of fund pollutants as the amount that minimizes the sum of damage and control costs. Using this definition, they derive two general rules, one of which is that the efficient level of pollution is not generally zero. Briefly explain why this is true.

11. Let's imagine that we're holding this course in a classroom, and you have to commute to get on campus. You get up in the morning, drive to campus, stop at a local gas station to fill up, then go to class. You also have to pay some of your school bills on the same day. Which of your market transactions on this day produced negative externalities and which produced positive externalities? Explain your answers.

Rewrite this text;   The Ultra Low Emission Zone (ULEZ) is a policy implemented in certain areas to reduce air pollution by charging vehicles that do not meet specific emission standards. To provide a summary of the main changes brought in by ULEZ, I will refer to the information from the BBC News article and the research briefing from the UK Parliament's Commons Library.According to the BBC News article, the ULEZ policy was introduced in London in April 2019 and expanded in October 2021. The main change brought by ULEZ is the requirement for vehicles entering the zone to meet strict emission standards. Petrol vehicles must meet Euro 4 standards, while diesel vehicles must meet Euro 6 standards. Non-compliant vehicles are subject to a daily charge. The ULEZ policy aims to improve air quality and reduce harmful emissions, particularly nitrogen dioxide and particulate matter.One potential benefit expected to arise from the introduction of ULEZ is the improvement in air quality. The…

What are the costs of pollution according to the Lancet Commission on pollution and health? Why are those numbers likely to be an underestimate? Explain.

Q. 3 in a small town, a paper mill discharges wastewater to the river, causing water pollution. suppose MD=3E and MAC= 40-2E. calculate the following and illustrate your answers with graphing: a) socially efficient level of emissions? what is total social cost related to this level of emission? b) consider a liability law requiring the polluter to compensate for all the damages caused. what is the polluter's optimal choice of emission level? what is total compliance cost at this level? c) consider an Emission standard set at the efficient level. what is polluters total compliance cost at this level? d) consider an emission tax policy. what is the optimal tax rate to achieve the efficienct emission level? what is polluter's total compliance cost at this level? e) consider an abatement subsidy policy. what is the optimal subsidy rate to achieve the efficienct emission level; what is polluters net receipt at this level?

What externality is carbon pricing trying to address? Explain why this is an externality. What roll does government have in addressing externalities

5B. Two textile mills, located across a river from each other, are polluting the river. The marginal costs of pollution reduction for each firm are MCE₁ = 4E₁ + 4 MCE2 = 4/3E2 + 4/3, where E is the reduction in pollution from unregulated levels. The associated marginal social benefit is estimated to be MSB = 10-E, where E = E₁ + E₂. a. What is the socially optimal level of water-pollution reduction? c. If instead the government imposed a standard requiring each firm to equally reduce the level of pollution to achieve the socially optimal solution in part (i), what are the costs for each firm?

There are three firms, A;B; and C that produce electricity. The first two firms have the same per-megawatt cost of production equal to $2, while firm C has a per-megawatt cost of $1. The firms differ, however, in their pollution. Firms A, B, and C produce respectively 1, 2, and 3 cubic feet of carbon monoxide per megawatt produced. A cubic foot of carbon monoxide pollutes the environment, and has a social cost of $2.5. The demand for electricity is represented by the inverse demand function P (Mw) =100 - Mw, where Mw represents the megawatts consumed by the public. Suppose firms are not held accountable for the pollution they produce. What is the competitive equilibrium price and quantity in the market for electricity? (remember that in a competitive market the price will be driven down to marginal cost (since firms in a competitive market earn zero economic profit). How much pollution is there at the competitive equilibrium and what is the social cost  of this pollution?

There are three firms, A;B; and C that produce electricity. The first two firms have the same per-megawatt cost of production equal to $2, while firm C has a per-megawatt cost of $1. The firms differ, however, in their pollution. Firms A, B, and C produce respectively 1, 2, and 3 cubic feet of carbon monoxide per megawatt produced. A cubic foot of carbon monoxide pollutes the environment, and has a social cost of $2.5. The demand for electricity is represented by the inverse demand function P (Mw) =100 - Mw, where Mw represents the megawatts consumed by the public. Suppose firms are not held accountable for the pollution they produce. Suppose that government allows firms to trade their permits to emit carbon monoxide. Q1: What is the competitive price of a permit to emit 1 cubic foot of carbon monoxide? And how much electricity is produced after the permits are traded?

Which of the following statements about pollution taxes, cap and trade, or command-and-control standards is FALSE? a.) Pollution taxes strictly control the amount of pollution but leave marginal abatement costs to be determined by the market. Cap-and-trade programs strictly control marginal abatement costs but leave the actual amount of pollution to be determined by the overall level of economic activity.   b.) Pollution taxes are unpopular in the U.S. because American companies tend to dislike taxes in general. However, pollution taxes offer firms some greater certainty about how large will be their marginal cost of abatement on the last unit of abatement they will need to do, if they are to minimize the costs they incur both for cleanup and for pollution taxes.   c.) Both command-and-control pollution standards, and cap-and-trade programs, can effectively limit the total amount of pollution, but command and control will be least-cost only by accident. Usually,…