A new technology has lowered the costs of reducing pollution. As a result, the allocatively efficient amount of pollution will: a decrease, but there may still be some pollution. b decrease to an amount where there is no pollution. c increase, but there may still be some pollution control. d increase to an amount where there is no pollution control.
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- Scenario 2. Two firms, A and B, each currently dump 50 tons of chemicals into the local river. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. It costs Firm A $100 for each ton of pollution that it eliminates before it reaches the river, and it costs Firm B $50 for each ton of pollution that it eliminates before it reaches the river. The government gives each firm 20 pollution permits. Government officials are not sure whether to allow the firms to buy or sell the pollution permits to each other. Refer to Scenario 2. What is the total cost of reducing pollution if the firms are allowed to buy and sell permits from each other? if firms are not allowed to buy and sell pollution permits from each other?Many economists would consider an efficient level of pollution control to occur where the marginal benefit of reducing pollution is ____________ the marginal cost of reducing pollution. Question 6 options: greater than equal to less thanWhat do you think is the best sort of public policy to deal with the following pollution problems? Options A. Direct Controls ( Regulate the amount of pollutant emitted, Ban on Emissions, issue fines and penalties to offenders, shut down the more egregious offenders.); B. Establish a CAP on total emissions on industries and issue permits to pollute that is sum is less than or equal the CAP that can be traded amount different firms. C. Tax polluters. D. Mount educational and pollution awareness and ask for voluntary compliance.
- Economics: Public Economics Question: 1 Table 3 The following table shows the marginal costs for each of four arms (A, B, C, and D) to eliminate units of pollution from their production processes. For example, for Firm A to eliminate one unit of pollution, it would cost $54, and for Firm A to eliminate a second unit of pollution it would cost an additional $67. Refer to Table 3. If the government charged a fee of $90 per unit of pollution, how many units of pollution would the arms eliminate altogether? Guess: 11 Question 2: Refer to Figure 5 (Graph 4). Which graph illustrates a pollution permit program? a. the left graph b. both graphs c. the right graph d. neither graph Thank you for your help and support Instructor Agent!A local drama company proposes a new neighbourhood theatre in Vancouver. Before approving thebuilding permit, the city planner completes a study of the theatre’s impact on the surroundingcommunity.a. One finding of the study is that theatres play very loud music, which adversely affects thecommunity. The city planner estimates that the cost to the community from the extra traffic is$7 per ticket. What kind of an externality is this? Why?b. Graph the market for theatre tickets, labelling the demand curve, the social-value curve, thesupply curve, the social-cost curve, the market equilibrium level of output, and the efficient levelof output. Also show the per-unit amount of the externality. c. On further review, the city planner uncovers a second externality. Rehearsals for the plays tendto run until late at night, with actors, stagehands, and other theatre members coming and goingat various hours. The planner has found that the increased foot traffic improves the safety of…8. Marketable permits are a market solution to pollution abatement which work best whena. all firms have the same valuation for pollution.b. the location of pollution matters.c. the government knows the right quantity of pollution abatement.d. some fi rms have already invested heavily in abatement equipment while others have done nothing.
- Externalities Mark owns a butchery. His marginal cost of selling meat is MC = 0.35Q, where Q is the pounds of meat he sells. Mark is in a competitive market and can sell all the meat he wishes for $7 per pound. However, the smell from the butchery bothers the customers of George, the owner of the coffee shop next door. Assume that every pound of meat costs George $1.4 worth of lost business. If Mark focuses on maximizing his profit, how much would he sell? At the profit-maximizing quantity from part a, does selling the last pound of meat benefit the society. Calculate the social marginal cost and compare it to the marginal benefit. Note that here “society” refers to Mark and George. What is the socially optimal quantity of meat sold?The optimal level of pollution occurs where ... Question 1Select one: a. total benefits equal total costs. b. marginal benefits equal marginal costs. c. private costs are minimized. d. private benefits are maximized. e. average revenue equals average cost.QUESTION 1 SCENARIO: Developers of a new housing scheme spend money in the roads, lighting and clearing land surrounding the scheme. The type of market failure represented by the scenario is a/an Negative externality Public good Asymmetric information Positive externality The market fails in this scenario because: No market transaction takes place Goods are under produced Goods are over produced No private position Solution to the market failure is Subsidy Government provision Taxation Screening Signaling The equilibrium quantity is ______________ the social efficient quantity. Greater than Lest than Equal to The private benefit curve is Shifts outward to the social benefit curve Shifts inward to the social benefit curve Remains unchanged The private cost curve is Shifts outward to the social benefit curve Shifts inward to the social benefit curve Remains unchanged The Efficient output is found where the Social cost and the social benefit curve…
- 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. Q1: What is the social cost at the pollution at the competitive equilibrium? and what is the socially optimal quantity of 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?