Worse than useless Europe's Emissions trading Scheme (ETS) has too many carbon emission permits trading at too low a price. Source: The Economist, January 25, 2014 Under what conditions would the ETS, a cap-and-trade system, reduce carbon emissions to the efficient quantity. Use a graph to illustrate your explanation. Also, show the outcome of issuing too many permits. permits was set such that_ and permits traded at a price O A. marginal private cost of electricity equals marginal benefit; equal marginal external cost O B. marginal social cost of electricity equals marginal benefit; below marginal external cost OC. marginal social cost of electricity equals marginal benefit; equal to marginal external cost OD. carbon emissions were eliminated; equal to marginal benefit OE. marginal private cost of electricity equals marginal benefit; above marginal external cost 45 40 35- 30- 25- 20- 15- 10- 5- o+ 0 Price and cost (cents per kilowatt hour) S=MC D=MB 100 200 300 400 500 600 700 800 Quantity (millions of kilowatt hours) >>> Draw only the objects specified in the question.

Worse than useless Europe's Emissions trading Scheme (ETS) has too many carbon emission permits trading at too low a price. Source: The Economist, January 25, 2014 Under what conditions would the ETS, a cap-and-trade system, reduce carbon emissions to the efficient quantity. Use a graph to illustrate your explanation. Also, show the outcome of issuing too many permits. permits was set such that_ and permits traded at a price O A. marginal private cost of electricity equals marginal benefit; equal marginal external cost O B. marginal social cost of electricity equals marginal benefit; below marginal external cost OC. marginal social cost of electricity equals marginal benefit; equal to marginal external cost OD. carbon emissions were eliminated; equal to marginal benefit OE. marginal private cost of electricity equals marginal benefit; above marginal external cost 45 40 35- 30- 25- 20- 15- 10- 5- o+ 0 Price and cost (cents per kilowatt hour) S=MC D=MB 100 200 300 400 500 600 700 800 Quantity (millions of kilowatt hours) >>> Draw only the objects specified in the question.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter13: Positive Externalities And Public Goods

Section: Chapter Questions

Problem 24P: Assume that the marginal private costs of a film producing fuel-efficient can; is greater than the...

See similar textbooks

Similar questions

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)?
Call a company be guaranteed all of the Social benefits of a new invention? Why or why not?
Name two public goods and explain why they are public goods.
Will the demand for borrowing and investing in R&D be higher or lower if there are no external benefits?
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.
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?
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.
Explain why the federal government funds national defense.
A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals to clear some of Sherwoods forest and grow com, but obtaining this additional economic output will have an environmental cost from reducing the number of trees. Table 12.11 shows possible combinations of economic output and environmental protection. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the number of trees, and the quantity of economic output, measured in corn, 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 T and R, decide which one is better. Why? In the choice between T and S, can you say which one is better, and why? If you had to guess, which choice would you think is more likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice Q or S? Why?
Education provides both private benefits to those who receive it and broader social benefits for the economy as a whole. Think about the types of policies a government can follow to address the issue of positive spillovers in technology and then suggest a parallel set of policies that governments could follow for addressing positive externalities in education.