Table: The Marginal Social Cost of Batteries) The accompanying table lists several price (P) and quantity (QS) values along the market supply curve for batteries. Because batteries generate toxic wastes, there is an external cost associated with thẻir production. The marginal external cost is estimated to be $10. The marginal social cost would then be indicated by the values in the column labeled: Table: The Marginal Social Cost of Batteries Quantity supplied (Qs) 5.00 Price (P) MSC1 MSC2 $10 MSC3 MSC4 $20 $2.00 $30 $20 26 7.00 2.60 16 36 26 28 7.67 2.80 18 38 28 32 9.00 3.20 22 42 32 36 10.33 3.60 26 46 36 38 11.00 3.80 28 48 38 OA. MSC1. OB. MSC2. OC. MSC3. OD. MSC4.

Table: The Marginal Social Cost of Batteries) The accompanying table lists several price (P) and quantity (QS) values along the market supply curve for batteries. Because batteries generate toxic wastes, there is an external cost associated with thẻir production. The marginal external cost is estimated to be $10. The marginal social cost would then be indicated by the values in the column labeled: Table: The Marginal Social Cost of Batteries Quantity supplied (Qs) 5.00 Price (P) MSC1 MSC2 $10 MSC3 MSC4 $20 $2.00 $30 $20 26 7.00 2.60 16 36 26 28 7.67 2.80 18 38 28 32 9.00 3.20 22 42 32 36 10.33 3.60 26 46 36 38 11.00 3.80 28 48 38 OA. MSC1. OB. MSC2. OC. MSC3. OD. MSC4.

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 42P: Table 12.12, shows the supply and demand conditions for a firm that will play trumpets on the...

See similar textbooks

Similar questions

(Negative Externalities) Suppose you wish to reduce a negative externality by imposing a tax on the activity that creates that externality. When the amount of the externality produced per unit of output increases as output increases, the correct tax can be determined by using a demand-supply diagram; show this. Assume that the marginal private cost curve slopes upward. Negative Externalities: The Market for Electricity in the Midwest:
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?
Table 12.12, shows the supply and demand conditions for a firm that will play trumpets on the streets when requested. QS1 is the quantity supplied without social costs. QS2 is the quantity supplied with social costs. What is the negative externality in this situation? Identify the equilibrium price and quantity when we account only for private costs, and then when we account for social costs. How does accounting for the externality affect the equilibrium price and quantity?
(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.
Draw a standard supply and demand diagram for televisions, and indicate the equilibrium price and output. a. Assuming that the production of televisions generates external costs, illustrate the effect of the producers being forced to pay a tax equal to the external costs generated, and indicate the equilibrium output. b. If instead of generating external costs, television production generates external benefits, illustrate the effect of the producers being given a subsidy equal to the external benefits generated, and indicate the equilibrium output.
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?
An emissions tax on a quantity of emissions from a film is not a command-and-control approach to reducing pollution. Why?
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.
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.
What is a marketable permit and what incentive does it provide for a firm to account for external costs?