4. As part of its production process the Peabody Coal Company used to dump foul sludgeinto the Ohio River. A Court has ordered to clean up an 'economically feasible' quantityof the sludge. Now the environmental group that brought the suit and Peabody arelitigating over Peabody's obligation under the order. If the total social cost and totalsocial benefits of sludge removal are as listed in the table below, how much sludge wouldPeabody remove?SludgeRemoval01234er5TSB04580110134150TSC01025426290 a) 1b) 2c) 3d) 4e) 5

Externalities are the harmful or beneficial side effects arise out of production or consumption of…

↓. As part of its production process the Peabody Coal Company used to dump foul sludge nto the Ohio River. A Court has ordered to clean up an ‘economically feasible' quantity of the sludge. Now the environmental group that brought the suit and Peabody are itigating over Peabody's obligation under the order. If the total social cost and total social benefits of sludge removal are as listed in the table below, how much sludge would Peabody remove? Sludge Removal 0 1 2 3 4 5 TSB 0 45 80 110 134 150 TSC 0 10 25 42 62 90

↓. As part of its production process the Peabody Coal Company used to dump foul sludge nto the Ohio River. A Court has ordered to clean up an ‘economically feasible' quantity of the sludge. Now the environmental group that brought the suit and Peabody are itigating over Peabody's obligation under the order. If the total social cost and total social benefits of sludge removal are as listed in the table below, how much sludge would Peabody remove? Sludge Removal 0 1 2 3 4 5 TSB 0 45 80 110 134 150 TSC 0 10 25 42 62 90

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter12: Environmental Protection And Negative Externalities

Section: Chapter Questions

Problem 12SCQ: Consider the case of global environmental problems that spill across international borders as a...

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Suppose a city releases 16 million gallons of raw sewage into a nearby lake. Table 12.8 shows the total costs of cleaning up the sewage to different levels, together with the total benefits of doing so. (Benefits include environmental, recreational, health, and industrial benefits.) Using the information in Table 12.8, calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. See Production, Costs and Industry Structure if you need a refresher on how to calculate marginal costs. What is the optimal level of sewage for this city? Why not just pass a law that films can emit zero sewage? After all, the total benefits of zero emissions exceed the total costs.
From an economic perspective, is it sound policy to pursue a goal of zero pollution? Why or why not?
Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once we accounted for both the private and additional external costs, the market price increased by only 50. If the external costs were 100 why did the price only increase by 50 when we accounted for all costs?
Consider two approaches to reducing emissions of CO2 into the environment from manufacturing industries in the United States. In the first approach, the U.S. government makes it a policy to use only predetermined technologies. In the second approach, the U.S. government determines which technologies are cleaner and subsidizes their use. Of the two approaches, which is the command-and-control policy?
A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals to clear some of Sherwoods forest and grow com, but obtaining this additional economic output will have an environmental cost from reducing the number of trees. Table 12.11 shows possible combinations of economic output and environmental protection. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the number of trees, and the quantity of economic output, measured in corn, on the vertical axis. Which choices display productive efficiency? How can you tell? Which choices show allocative efficiency? How can you tell? In the choice between T and R, decide which one is better. Why? In the choice between T and S, can you say which one is better, and why? If you had to guess, which choice would you think is more likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice Q or S? Why?
Table 12.5 provides the supply and demand conditions for a manufacturing film. The third column represents a supply curve without accounting for the social cost of pollution. The fourth column represents the supply curve when the film is required to account for the social cost of pollution. Identify the equilibrium before the social cost of production is included and after the social cost of production is included.
Identify the following situations as an example of a negative or a positive externality: You are a birder (bird watcher), and your neighbor has put up several birdhouses in the yard as well as planting trees and flowers that attract birds. Your neighbor paints his house a hideous color. Investments in private education raise your countrys standard of living. Trash dumped upstream flows downstream right past your home. Your roommate is a smoker, but you are a nonsmoker.
Show the market for cigarettes in equilibrium, assuming that there are no laws banning smoking in public. Label the equilibrium private market price and quantity as Pm and Qm. Add whatever is needed to the model to show the impact of the negative externality from second-hand smoking. (Hint: In this case it is the consumers, not the sellers, who are creating the negative externality.) Label the social optimal output and price as Fe and Qe. On the graph, shade in the deadweight loss at the market output.
Suppose you want to put a dollar value on the external costs of carbon emissions from a power plant. What information or data would you obtain to measure the external [not social] cost?
Suppose that Sonys R. Is this a private or social benefit?
Is zero pollution an optimal goal? Way or why not?
Classify the following pollution-control policies as command-and-control or market incentive based. A state emissions tax on the quantity of carbon emitted by each firm. The federal government requires domestic auto companies to improve car emissions by 2020. The EPA sets national standards for water quality. A city sells permits to films that allow them to emit a specified quantity of pollution. The federal government pays fishermen to preserve salmon.