Chapter 16, Problem 4DQ

Distinguish between a carbon-tax and a cap-andtrade strategy for reducing carbon dioxide and other so-called greenhouse gases (that are believed by many scientists to be causing global warming). Which of the two strategies do you think would have the most political support in an election in your home state? Explain your thinking.

Is the demand for public transit more responsive to price changes or service quality changes? Discuss the implication to transportation policies.

True or false questions:   1.The fixed component of transportation, consist of infrastructures such as vehicles, trains, ships and planes.   Select one: True False   2. Direct costs incurred by the users and operators of transport services are also known as external costs. Select one: True False   3.  Excess supply occurs when the price rises above the equilibrium price, quantity demanded will decrease while quantity supplied  will increase Select one: True False

Should the Park Service be concerned about the economic impact of a reduceddemand for visits on surrounding communities?

What are the external costs of heavy traffic?

Which of the following price structures tend to be the most effective at promoting water conservation?  Group of answer choices A. Constant block structure B. Marginal price structure C. Increasing block structure D. Decreasing block structure

Consider the market for trees in a public park. These trees are a public good that give benefits to multiple groups of people, as described below. Each Marginal Willingness to Pay curve represents the aggregation of all the individuals in that group, and those groups make decisions collectively. Additionally, the cost of planting trees is given. Consider Q to be the number of trees in the park. Note that no one is ever worse off from additional trees.   Arborists: MWTP = 2000 – 5Q                                  Total WTP = 2000Q - 2.5Q2 Environmentalists: MWTP = 1500 – 10Q                 Total WTP = 1500Q – 5Q2 Casual Park Visitors: MWTP = 800 – 10Q                Total WTP = 800Q – 5Q2 Park Haters: MWTP = 500 – 50Q                              Total WTP = 500Q – 25Q2 MC = 1400                                                                  Total Cost = 1400Q   (a) If the government does not intervene into the market, how many trees will be planted? (b) What is the socially…

The market for paper in a particular region in the United States is characterized by the following demand and supply​ curves: QD = 160000 - 2000P QS = 50000 + 2000P where QDis the quantity demanded in​ 100-pound lots, QS is the quantity supplied in​ 100-pound lots, and P is the price per​ 100-pound lot. Currently there is no attempt to regulate the dumping of effluent into streams and rivers by the paper mills. As a​ result, dumping is widespread. The marginal external cost​ (MEC) associated with the production of paper is given by the curve:   MEC = 0.0006Qs   Find the competetive equilibrium price and quantity with no attempt is made to monitor or regulate the dumping of effluent. Then find the socially efficient price and output of paper.

Suppose that a chemical manufacturing plant is releasing nitrogen oxides into the air, and these emissions are associated with health and ecological damages. Economists have estimated the following marginal costs and benefits for the chemical market, where Q is monthly output in thousands of pounds and P is price per pound. MSB = 50 – 0.4Q; MSC = 2 + 0.4Q;  MEB = 0; MEC = 0.2Q. Find the dollar value of a product charge that would achieve an efficient solution.