ions 1. A single firm's innovations in production technology often benefit the production ofother firms because these other firms learn about the new technology and can use someof the ideas in their own production.emsa. Is there an externality here?0. How would an economist rank the following two policies in this situation? Why?1.A tariff on imports, to make sure that domestic production using the newtechnology occurs.IL. A subsidy to domestic production, to make sure that domestic production usingthe new technology occurs.C. What third policy (a tax or a subsidy to something) would the economist recommendas even better than these two?

The specificity rule in economics asserts that in the presence of negative externalities and/or…

-A single firm's innovations in production technology often benefit the production of other firms because these other firms learn about the new technology and can use some of the ideas in their own production. a. Is there an externality here? . How would an economist rank the following two policies in this situation? Why? A tariff on imports, to make sure that domestic production using the new technology occurs. IL. A subsidy to domestic production, to make sure that domestic production using the new technology occurs. C what third policy (a tax or a subsidy to something) would the economist recommend as even better than these two?

-A single firm's innovations in production technology often benefit the production of other firms because these other firms learn about the new technology and can use some of the ideas in their own production. a. Is there an externality here? . How would an economist rank the following two policies in this situation? Why? A tariff on imports, to make sure that domestic production using the new technology occurs. IL. A subsidy to domestic production, to make sure that domestic production using the new technology occurs. C what third policy (a tax or a subsidy to something) would the economist recommend as even better than these two?

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 5SCQ: Consider two approaches to reducing emissions of CO2 into the environment from manufacturing...

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Similar questions

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?
In the Land of Purity, there is only one form of pollution, called gunk. Table 12.14 shows possible combinations of economic output and reduction of gunk, depending on what kinds of environmental regulations you choose. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the percentage reduction of gunk, and with the quantity of economic output 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 K and L, can you say which one is better and why? In the choice between K. and N, can you say which one is better, and why? If you had to guess, which choice would you think is move likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice L or M? Why?
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?
In what ways (it) company investments in research and development create positive externalities?
Radio stations, tornado sirens, light houses, and street lights are all public goods in that all are nonrivalrous and nonexclusionary. Therefore why does the government provide tornado sirens, street lights and light houses but not radio stations (other than PBS stations)?
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.
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?
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.
From an economic perspective, is it sound policy to pursue a goal of zero pollution? Why or why not?
In the tradeoff between economic output and environmental protection, what do the combinations on the protection possibility curve represent?
Suppose that a mayor of a large city believes strongly that education provides great benefits to the community andurges the state government to provide the district with more money. An economist would say that this reflects theMayor's belief that:Asince teachers are overpaid, the district needs more money to hire enough teachers for its classrooms.Bthere are positive external benefits associated with education.Cthere are nontrivial external costs associated with education.Dpublic schools provide a higher quality education than private schools.
a) Explain how the positive externalities normally created by activities such assnow shovelling lead to an inefficiency from a social point of view.