Marginal Cost to Eliminate (Dollars) First Unit Second Unit Third Unit Fourth Unit Firm A 54 67 82 107 57 68 86 108 C 54 66 82 107 62 73 91 111 The table shows the marginal costs for each of four firms (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 addidonal 567 1f the government wanted to reduce pollution from 16 units to exactly 8 units, which of the following fees per unit of pollution would achieve that goal? O 70 O 85 O 87 O 80

Marginal Cost to Eliminate (Dollars) First Unit Second Unit Third Unit Fourth Unit Firm A 54 67 82 107 57 68 86 108 C 54 66 82 107 62 73 91 111 The table shows the marginal costs for each of four firms (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 addidonal 567 1f the government wanted to reduce pollution from 16 units to exactly 8 units, which of the following fees per unit of pollution would achieve that goal? O 70 O 85 O 87 O 80

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter14: Environmental Economics

Section: Chapter Questions

Problem 5SQ: The perfectly competitive profit-maximizing firm in Exhibit 6 creates water and air pollution as a...

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A city currently emits 15 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. 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?
How can high-income countries benefit from covering much of the cost of reducing pollution created by low-income countries?
Is zero pollution possible under a marketable permits system? Why or why not?
(External Costs with Variable Technology) Think of an industry that pollutes the water and has access to variable technology for reducing that pollution. Graphically illustrate and explain the impact of each of the following, other things constant, on the optimal level of water quality: a. New evidence is discovered about a greater risk of cancer from water pollution. b. The cost of pollution-control equipment increases. c. A technological improvement reduces the cost of pollution control.
The perfectly competitive profit-maximizing firm in Exhibit 6 creates water and air pollution as a consequence of producing its output of pigs. If pollution costs are borne by third parties, the firm will maximize economic profit by choosing to a. voluntarily incur costs to reduce its pollution. b. produce at output rate Q3. c. produce at output rate Q2. d. produce at output rate Q4. EXHIBIT 6 Private and Social Cost
Can extreme levels of pollution hurt the economic development of a high-income country? Why or why not?
In a market without environmental regulations, will the supply curve for a film account for private costs, external costs, both, or neither? Explain.
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.
An emissions tax on a quantity of emissions from a film is not a command-and-control approach to reducing pollution. Why?
What is a marketable permit and what incentive does it provide for a firm to account for external costs?