Use this information to answer questions 1-3 Price $ 3000 2900 2700 ο ο ο 2600 Question 1 200 O 325 O 375 In above, if there are no external costs, the rate of output will be: 400 Question 2 In figure above, if the rate of output is 400 units: O Social costs exceed private costs. O There is no market failure. O Pollution costs (for example) are not external. All of these options are correct. Question 3 200 325 375 400 $3000 O $2800 $600 $400 O $300 Social MC In the figure above, what is the amount of the negative externality? O $200 Private MC MR Quantity

Use this information to answer questions 1-3 Price $ 3000 2900 2700 ο ο ο 2600 Question 1 200 O 325 O 375 In above, if there are no external costs, the rate of output will be: 400 Question 2 In figure above, if the rate of output is 400 units: O Social costs exceed private costs. O There is no market failure. O Pollution costs (for example) are not external. All of these options are correct. Question 3 200 325 375 400 $3000 O $2800 $600 $400 O $300 Social MC In the figure above, what is the amount of the negative externality? O $200 Private MC MR Quantity

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 41P: Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once...

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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?
Assume that the marginal private costs of a film producing fuel-efficient can; is greater than the marginal social costs. Assume that the marginal private benefits of a firm producing fuel efficient cars are the same as the marginal social benefits. Discuss one wags.r that the government cans ï¬‚y to increase production and sales of fuel efficient cars to the socially desirable amount. Hint: the government is flying to affect production through costs, net benefits.
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?
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?
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?
Is zero pollution an optimal goal? Way or why not?
Suppose that Sonys R. Is this a private or social benefit?
In the tradeoff between economic output and environmental protection, what do the combinations on the protection possibility curve represent?
What are the economic tradeoffs between low-income and high-income countries in international conferences on global environmental damage?
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.
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.
In what ways (it) company investments in research and development create positive externalities?