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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Chapter 16, Problem 1.7P
To determine
Impact of the natural disaster on the recovery and adjustment of the economy.
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Suppose Fischer Pond is a common-property resource—anyone can fish without having to pay for access. Locke Lake is privately owned—people who want to fish must purchase one of a limited number of permits from the lake's owner each season. According to the incentives that private ownership creates, which of the following would you expect to happen?
Check all that apply.
The owner of Locke Lake is likely to keep the lake clean and unpolluted.
The owner of Locke Lake is likely to limit the number of fishing permits in order to maintain a plentiful stock of fish.
Fischer Pond is less likely to experience a dwindling stock of fish each season.
Give typing answer with explanation and conclusion
One advantage of an emissions tax over a cap-and-trade system is that
a. permit markets can have transactions costs that taxes do not.
b. taxes put a price on pollution, but cap-and-trade systems do not.
c. once a cap-and-trade system is in place, there is no way for the government to adjust the price of permits.
d. taxes are always popular.
Suppose that a small company is thinking of putting plants in their lobby for employees to view and enjoy. Since the plants are to be viewed by employees, the plants are non-excludable (it is infeasible to move a plant each time a specific individual walks by) and non-rival in consumption (if one worker looks at the plant, it does not prevent another from doing so as well).
The company employs three workers: Robin, Alex, and Sharon. The company is thinking about buying up to three plants, and wants to know how much workers would enjoy each plant. For Robin, the first plant has a benefit of $47 per day, the second plant has a benefit of $37 per day, and the third plant has a benefit of $13 per day.
For Alex, the first plant has a benefit of $41 per day, the second has a benefit of $28 per day, and the third has a benefit of $6 per day.
For Sharon, the first plant has a benefit of $31 per day, the second has a benefit of $19 per day, and the third has a benefit of $2 per day.
Given that…
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Principles Of Economics, Student Value Edition
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