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- The use of gasoline creates a negative externality through air pollution. What is the size of the deadweight loss (DWL) caused by the externality? Select ALL letters that are part of the DWL Priate 700 OA OHThe use of gasoline creates a negative externality through air pollution. What is the size of the deadweight loss (DWL) caused by the externality? Select ALL letters that are part of the DWL Priake 200 OAExplain the connection between the following two concepts: Producer surplus and Benefits of a regulation on pollution.
- The figure above shows the marginal social cost and marginal social benefit curves for a chemical producing firm operating upstream from a hatchery. If the government imposes a tax of $20 per ton of emissions, the chemicals firm will emit MSC, MSB ($/ton) 100 MSC 90 800 70 60 50 40 30 20 MSB 10 2. 3. 6. 10 Quantity of Emissions (tons per day)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 $2,500, how many tonnes of pollutants would now be dumped? What…How can external effects change supply and demand in electricity generation (Please provide a drawing)
- What happens in the market for a good that pollutes the air when it is manufactured if government decides to tax its production? Will this reduce the amount of air pollution?Use appropriate figures to show the deadweight losses associated with a) positive externalities b) negative externalities (in a perfectly competitive goods market)Morrison Inc. produce disposable nappies at marginal cost given by MC = 1.5Q, where Q is number of units produced per day (in thousands). Production of disposable nappies incurs a marginal external cost given by MEC = 0.5Q. The inverse demand for disposable nappies is given by P = 700 – 2Q. What is deadweight loss associated with the externality and what is the socially optimal level of production? In a fully labelled diagram, draw the MC, MEC and demand curves and show the deadweight loss.
- Price ($) R H K W M SMC Demand PMC Quantity Refer to the graph above. What areals) represents the government revenue if pollution permits (sold to firms) are implemented to fix the externality? (hint: if there is no government revenue then answer: "zero")USE THE GRAPH! There is a negative externality from Lyft rides (TRAFFIC) of $0.60 per mile. If the city still charged a $0.60 tax, what would be the deadweight loss? DWL=The table below shows the quantities of gas demanded and supplied at different prices in a city where a tax of $0.50 per gallon is collected from sellers of gas. The marginal external cost of gas is constant at $1 per gallon. Price (S/gallon) Quantity (million gallons) Demanded Supplied 2.00 24 16 2.50 20 20 3.00 16 24 3.50 12 28 Question 10 Homework Answered Fill in the Blanks Type your answers in all of the blanks and submit In the scenario above, the marginal benefit received by gas consumers is $ the gas producers 2.50 marginal private cost (including the tax) is $ 2.50 the marginal social cost is $3 and the deadweight loss is $ million.
