Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
Question
Chapter 11, Problem 10PA
To determine

Cost benefit analysis.

Blurred answer
Students have asked these similar questions
The depletion of the ozone layer is attributed to the emission of Chlorofluorocarbons (CFCs). Before 1990, the use of coolants in refrigerators such as Freon released a significant amount of CFCs.   Given the above scenario, is the equilibrium level of refrigerators produced prior to 1990 in the market “too much” or “too little” compared to the social optimum? Explain why this occurs. Support your answer by drawing the private and social, marginal cost and marginal benefit curves for refrigerators. Identify the deadweight loss if any exists. Identify a regulation that the government can use to achieve the socially optimal level of refrigerators. Explain how this regulation works. Explain how the Coase theorem could hypothetically work to achieve the optimal level of CFCs emissions in this context. Enumerate at least one major drawback that hinders the creation of a market for CFCs without any third party regulators in the real world. Assume that the marginal savings for refrigerator…
Suppose the marginal benefit (MB) and marginal cost (MC) curves for emitting particulate matter are given by the following schedules, where E is the quantity of emissions per period. The marginal benefits and costs are measured at the quantities of emissions shown. E/Period MB ($ MC ($) 0 230 0 200 190 10 400 150 30 600 110 50 800 70 70 1000 30 90 Use the information above to calculate the tax rate that would achieve the efficient rate of emissions. Efficient Tax Rate =$__ per unit of pollution
To evaluate potential policy options that address emissions and climate change, economists often recommend a thorough cost-benefit analysis, in which the avoided environmental and human health damages are weighed against the["marginal abatement costs", "marginal abatement benefits"]  . Most estimates by environmental economists suggest that the benefits of emission reduction are somewhere between 5-20% of world GDP, while the costs are between 1-4%.  Using a cost-benefit analysis, this would imply that these policies ["should", "should not"]  be implemented. The resulting policies can take the form of ["preventive", "adaptive"]  strategies, those that reduce damages resulting from climate change, or ["preventive", "adaptive"]  strategies that reduce emissions.
Knowledge Booster
Similar questions
  • High-income people are willing to pay more thanlower-income people to avoid the risk of death.For example, they are more likely to pay for safetyfeatures on cars. Do you think cost–benefit analystsshould take this fact into account when evaluatingpublic projects? Consider, for instance, a rich townand a poor town, both of which are considering theinstallation of a traffic light. Should the rich town usea higher dollar value for a human life in making thisdecision? Why or why not?
    Suppose there are 2 petrochemical companies that cause water pollution in the surrounding environment with marginal costs MC1 = 150e1 and MC2 = 50e2 (where e1 and e2 are the amount of waste in m3 reduced by company 1 and company 2). Initially, company 1 disposed of 50 m3 of waste and company 2 disposed of 40 m3 of waste. a. If the government wants to ensure the total waste is reduced by 20 m3 with a cost-effective approach, how much waste must each company reduce?
    Consider two groups of citizens, each group can either choose to drive x = d or to take public transport x = p. The first group, group 1, enjoys driving and has the following benefit from using their car within the ULEZ area: B1(x1 = d) = 18. The second group, group 2, does not enjoy driving and has a benefit of B2(x2 = d) = 0 from driving their car. If they don’t drive, citizens can use public transport to get around. The benefit of doing so is the same for both groups: B1(x1 = p) = B2(x2 = p) = 10. Both groups drive cars that do not meet the ULEZ requirements and therefore create excessive pollution. For simplicity, we consider that pollution, and the health problems it induces, are the main cost of driving. This cost is imposed on both groups and is equal to Ci(x1 = d, x2 = d) = 10 if both groups drive, Ci(x1 = p, x2 = d) = Ci(x1 = d, x2 = p) = 5 if only one group drives and Ci(x1 = p, x2 = p) = 0 if neither group drives, where i represents either group 1 or group 2. The utility of…
  • Consider two groups of citizens, each group can either choose to drive x = d or to take public transport x = p. The first group, group 1, enjoys driving and has the following benefit from using their car within the ULEZ area: B1(x1 = d) = 18. The second group, group 2, does not enjoy driving and has a benefit of B2(x2 = d) = 0 from driving their car. If they don’t drive, citizens can use public transport to get around. The benefit of doing so is the same for both groups: B1(x1 = p) = B2(x2 = p) = 10. Both groups drive cars that do not meet the ULEZ requirements and therefore create excessive pollution. For simplicity, we consider that pollution, and the health problems it induces, are the main cost of driving. This cost is imposed on both groups and is equal to Ci(x1 = d, x2 = d) = 10 if both groups drive, Ci(x1 = p, x2 = d) = Ci(x1 = d, x2 = p) = 5 if only one group drives and Ci(x1 = p, x2 = p) = 0 if neither group drives, where i represents either group 1 or group 2. The utility of…
    Consider two groups of citizens, each group can either choose to drive x = d or to take public transport x = p. The first group, group 1, enjoys driving and has the following benefit from using their car within the ULEZ area: B1(x1 = d) = 18. The second group, group 2, does not enjoy driving and has a benefit of B2(x2 = d) = 0 from driving their car. If they don’t drive, citizens can use public transport to get around. The benefit of doing so is the same for both groups: B1(x1 = p) = B2(x2 = p) = 10. Both groups drive cars that do not meet the ULEZ requirements and therefore create excessive pollution. For simplicity, we consider that pollution, and the health problems it induces, are the main cost of driving. This cost is imposed on both groups and is equal to Ci(x1 = d, x2 = d) = 10 if both groups drive, Ci(x1 = p, x2 = d) = Ci(x1 = d, x2 = p) = 5 if only one group drives and Ci(x1 = p, x2 = p) = 0 if neither group drives, where i represents either group 1 or group 2. The utility of…
    Consider two groups of citizens, each group can either choose to drive x = d or to take public transport x = p. The first group, group 1, enjoys driving and has the following benefit from using their car within the ULEZ area: B1(x1 = d) = 18. The second group, group 2, does not enjoy driving and has a benefit of B2(x2 = d) = 0 from driving their car. If they don’t drive, citizens can use public transport to get around. The benefit of doing so is the same for both groups: B1(x1 = p) = B2(x2 = p) = 10. Both groups drive cars that do not meet the ULEZ requirements and therefore create excessive pollution. For simplicity, we consider that pollution, and the health problems it induces, are the main cost of driving. This cost is imposed on both groups and is equal to Ci(x1 = d, x2 = d) = 10 if both groups drive, Ci(x1 = p, x2 = d) = Ci(x1 = d, x2 = p) = 5 if only one group drives and Ci(x1 = p, x2 = p) = 0 if neither group drives, where i represents either group 1 or group 2. The utility of…
    Recommended textbooks for you
  • Essentials of Economics (MindTap Course List)
    Economics
    ISBN:9781337091992
    Author:N. Gregory Mankiw
    Publisher:Cengage Learning
    Principles of Microeconomics (MindTap Course List)
    Economics
    ISBN:9781305971493
    Author:N. Gregory Mankiw
    Publisher:Cengage Learning
    Principles of Microeconomics
    Economics
    ISBN:9781305156050
    Author:N. Gregory Mankiw
    Publisher:Cengage Learning
  • Principles of Economics, 7th Edition (MindTap Cou...
    Economics
    ISBN:9781285165875
    Author:N. Gregory Mankiw
    Publisher:Cengage Learning
    Principles of Economics (MindTap Course List)
    Economics
    ISBN:9781305585126
    Author:N. Gregory Mankiw
    Publisher:Cengage Learning
    Microeconomics A Contemporary Intro
    Economics
    ISBN:9781285635101
    Author:MCEACHERN
    Publisher:Cengage
  • Essentials of Economics (MindTap Course List)
    Economics
    ISBN:9781337091992
    Author:N. Gregory Mankiw
    Publisher:Cengage Learning
    Principles of Microeconomics (MindTap Course List)
    Economics
    ISBN:9781305971493
    Author:N. Gregory Mankiw
    Publisher:Cengage Learning
    Principles of Microeconomics
    Economics
    ISBN:9781305156050
    Author:N. Gregory Mankiw
    Publisher:Cengage Learning
    Principles of Economics, 7th Edition (MindTap Cou...
    Economics
    ISBN:9781285165875
    Author:N. Gregory Mankiw
    Publisher:Cengage Learning
    Principles of Economics (MindTap Course List)
    Economics
    ISBN:9781305585126
    Author:N. Gregory Mankiw
    Publisher:Cengage Learning
    Microeconomics A Contemporary Intro
    Economics
    ISBN:9781285635101
    Author:MCEACHERN
    Publisher:Cengage