Chapter 28, Problem 1DQ

To determine

How do deposits on bottles and cans affect the incentives of individuals to recycle these products?

Explanation of Solution

• Some states make retailers collect deposits of a nickel or a dime on every can and bottle they sell. These deposits far exceed the economic value of the can or bottle.
• Many provisions related to deposits of bottles and cans will increase the incentive for an individual to recycle these products. This is because the bottles and cans deposits will lead to increase in the price of bottles and cans for the consumers as they will incur an additional cost of the things packed in bottles and cans.
• If an individual saves the bottles and cans that they have then they will not face an additional cost for buying a product that comes in bottles or cans.
• No, it is not possible for the bottle and can deposit to be too high, in the sense that they induce too much recycling. This is because recycling also incurs the cost and excessive recycling is not fruitful.

Economics Concept Introduction

Introduction:

Recycling is the process of making the waste materials to be used again after its treatment. It is one of the ways of sustainable use of the resource. Recycling helps in regenerating the waste resource in its new form.