Principles Of Economics, Student Value Edition
12th Edition
ISBN: 9780134079288
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: Prentice Hall
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Question
Chapter 16, Problem 1.2P
To determine
The effect of carbon tax on the electricity users of the two regions.
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Students have asked these similar questions
Which of the following market failures does a carbon tax most explicitly try to address?
Select one:
a. monopolies
b. lack of consumer information C. externalities
d. corrupt politicians
Please don't copy
1. Draw a diagram which illustrates in economic terms how a carbon fee and dividend policy - a type of carbon tax on the sale of fossil fuels where the revenue from this tax is distributed regularly to a nation's population - would effect carbon emissions.
2. Referring back to the diagram you drew, how would a carbon dividends plan help reduce the efficiency loss from carbon emissions?
Imagine that in the state of California a chemical producing firms has a marketable permit that allows 800 tons of emissions. However, the marketable permit is shrinkable, and the firm will only be allowed 400 tons of emissions next year. The chemical producing firm estimates that its actual emissions next year will be 500 tons. Which of the following actions would be in the best interest of the chemical producing firm?
Group of answer choices
sell a marketable permit allowing for 100 tons of emissions
not to buy or sell a marketable permit
buy a marketable permit allowing for 100 tons of emissions
buy a marketable permit allowing for 500 tons of emissions
Chapter 16 Solutions
Principles Of Economics, Student Value Edition
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- Economists offer two major potential policies to reduce our greenhouse gas emissions: pollution taxes and cap-and-trade programs. Which do you think would be most effective at reducing emissions? Discuss the pros and cons of each, as well as the difference between the two policies.arrow_forwardIn the graph below, circle the efficient level of emissions.arrow_forwardExplain how marketable emission credits add to overall economic efficiency, compared to across-the-board limitations on maximum discharges of air pollutants by firms.arrow_forward
- Use the graph to explain whether an efficient level of emissions can be attained in two different regions for example an urban and a rural areaarrow_forwardEmission charges and cap-and-trade systems are the two dominant market incentive-based approaches for the reduction of emissions. Describe how an emission charge or tax works. Describe how a cap-and-trade system works. Contrast the two systems: what are the fundamental differences between them? Do those differences matter? Provide two examples of jurisdictions that impose a carbon tax. Provide two examples of jurisdictions that imposes a cap-and-trade regime. As the manager of a business that produces emissions, which system would you prefer to face? Why?arrow_forwardSuppose a country has two airlines. One is a small domestic airline that uses modern airplanes with lower CO2 emissions, and the other is a large international airline that uses older jumbo jets carrying hundreds of people at one time. A carbon emissions tax on airlines would be more efficient than a strict limit (command and control) on the total amount of carbon emissions each airline can produce. Two reasons that support this statement are: a. A carbon emissions tax would a.allow the larger airline to continue using its less efficient airplanes b.not allow the large airline to continue using its less efficient airplanes . b. A command-and-control policy would likely a.allow the larger airline to continue its service. b.force the larger airline to curb its service.arrow_forward
- Why do some economists believe a carbon tax is a better policy?arrow_forwardConsider an economy with 2 plants, A and B, whose operations produce emissions. The graphs show the marginal benefits (MB) to each plant from its emissions on the y-axis (in Euros) and the quantity of emissions in tons on the x-axis. The graph on the left represents the case when the government imposes a limit on emissions. The graph on the right represents the case when the government imposes a tax on emissions.arrow_forwardExplain the difference between regulating emissions via fees vs. standards. Which of the two would be more efficient if there are large differences between the firms’ marginal costs of abatement.arrow_forward
- how can gradually rising fees on all carbon emissions, whose proceeds are returned directly to the American people through quarterly dividend checks Cut Emissions Without Wrecking the Economy?arrow_forwardTypically this kind of economic activity results in environmental harm through production and consumption externalities. When a country such as Econ Land manages to break the link between economic activity and environmental harm, it is known as ["decoupling", "uncoupling"] . Whether Econ Land has truly broken this link or not depends on the amount of ["export pollution", "import pollution"] they are responsible for, pollution in other countries resulting from the production of products consumed in the country of Econ Land.arrow_forwardRewrite this text; The Ultra Low Emission Zone (ULEZ) is a policy implemented in certain areas to reduce air pollution by charging vehicles that do not meet specific emission standards. To provide a summary of the main changes brought in by ULEZ, I will refer to the information from the BBC News article and the research briefing from the UK Parliament's Commons Library.According to the BBC News article, the ULEZ policy was introduced in London in April 2019 and expanded in October 2021. The main change brought by ULEZ is the requirement for vehicles entering the zone to meet strict emission standards. Petrol vehicles must meet Euro 4 standards, while diesel vehicles must meet Euro 6 standards. Non-compliant vehicles are subject to a daily charge. The ULEZ policy aims to improve air quality and reduce harmful emissions, particularly nitrogen dioxide and particulate matter.One potential benefit expected to arise from the introduction of ULEZ is the improvement in air quality. The…arrow_forward
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