EBK ECONOMICS TODAY
18th Edition
ISBN: 9780133920116
Author: Miller
Publisher: YUZU
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Chapter 27, Problem 2FCT
To determine
Why city government think that they gain from imposing restrictions of usage of plastic bags.
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Example: Question 4a.) Arthur’s demand to reduce electric and magnetic fields (EMFs) is P = 20 – 2 Q, whileRonald’s demand is P = 15 – 3 Q. If the marginal cost of reducing emissions is equal to$15 and is constant, what is the optimal amount of EMF reduction? b.) What Lindahl prices would you charge Arthur and Ronald? What might prevent you fromcollecting these prices?c.) How would your answers change if the marginal cost of reducing emissions was equal to$10 and is constant?d.) What are the consumer surpluses of Arthur and Ronald in c.)?
The table below shows the demand for pollution permits to emit hydrocarbons in a particular industrial park. Each permit allows the owner to
release one tonne of pollutants into the atmosphere.
Price per
Pollution Permit
Quantity of Permits
$4,500
100
4,000
200
3,500
300
3,000
400
2,500
500
2,000
600
1,500
700
were charged, how many tonnes of pollutants would be discharged into the atmosphere, assuming a straight-line
a. If fee for a pollution perm
demand curve?
Quantity:
tonnes
b. Suppose government were to set a fee of $2,500 per pollution permit. How many tonnes of pollutants would now be dumped? What is the total
revenue received by government?
Quantity:
tonnes
Total revenue: $
c. Suppose that a new technology allows for a significant reduction in hydrocarbons at a relatively low cost so that the demand for pollution permits
in the industrial park drops by 200 tonnes. Assuming that government holds the permit fee at $2,500, how many tonnes of pollutants would now be
dumped? What…
Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 16 - 2E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 8 - E. If the government raises the emissions tax from $2 to $3, then the benefits of adopting the new technologies increase by $____.
(Hint: recall that the benefits from adopting new technologies are simply the difference in total compliance costs.)
THE ANSWER IS NOT 2 or 1.75
Might be 1.25 or 4.50
Chapter 27 Solutions
EBK ECONOMICS TODAY
Ch. 27 - Prob. 27.1LOCh. 27 - Prob. 27.2LOCh. 27 - Prob. 27.3LOCh. 27 - Prob. 27.4LOCh. 27 - Prob. 27.5LOCh. 27 - Prob. 27.6LOCh. 27 - Prob. aFCTCh. 27 - Prob. bFCTCh. 27 - Prob. cFCTCh. 27 - Prob. dFCT
Ch. 27 - Prob. eFCTCh. 27 - Prob. 1CTQCh. 27 - Prob. 2CTQCh. 27 - Prob. 1FCTCh. 27 - Prob. 2FCTCh. 27 - Prob. 1PCh. 27 - Prob. 2PCh. 27 - Prob. 3PCh. 27 - Prob. 4PCh. 27 - Prob. 5PCh. 27 - Prob. 6PCh. 27 - Prob. 7PCh. 27 - Prob. 8PCh. 27 - Prob. 9PCh. 27 - Prob. 10PCh. 27 - Prob. 11PCh. 27 - Prob. 12PCh. 27 - Prob. 13PCh. 27 - Prob. 14PCh. 27 - Prob. 15PCh. 27 - Prob. 16P
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