Chapter14: Environmental Economics
Section: Chapter Questions
Problem 3SQ: From an economic viewpoint, the optimal amount of pollution a. is zero because all pollution imposes...
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Transcribed Image Text:Use the diagram below and information provided to answer the question. Assume a pulp mill is the owner of a lake and you use the lake for fishing. The pulp mill uses the lake to discharges pollutants. You wo
prefer the lake to be free of pollutants as you use it for recreation and fishing. The marginal damage function and marginal abatement cost are as follows.MD = 5E and MAC = 600 - 10E.
At the socially efficient level of emission, net gain to you is
Property rights and net social gains. You need to
figure out what lines labelled 1 and 2 represent.
700
600
500
400
%24
300
a
2,
200
100
b
E*
max
10
20
30
40
50
60
70
Emissions (tonnes/month)
Select one:
а. О
b. 1000
c. 8000
d. 4000
o o o o
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ISBN:
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Author:
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Publisher:
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