In moving from 0.4 mg/L to 0.7 mg/L of abatement, show and clearly label on the figure above the change in total combined social spending that occurs as a result of the changes above. You do NOT have to show the underlying changes to support your answer. Dollars (Millions) 3.5 1.5 0.5 0.5 Nitrate Contamination (Mg/L) 1.5 Question Q6 Is the area shown in the previous question an increase or decrease in total combined social spending? Just indicate your answer by saying "increase" or "decrease" below.

In moving from 0.4 mg/L to 0.7 mg/L of abatement, show and clearly label on the figure above the change in total combined social spending that occurs as a result of the changes above. You do NOT have to show the underlying changes to support your answer. Dollars (Millions) 3.5 1.5 0.5 0.5 Nitrate Contamination (Mg/L) 1.5 Question Q6 Is the area shown in the previous question an increase or decrease in total combined social spending? Just indicate your answer by saying "increase" or "decrease" below.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter8: Market Failure

Section: Chapter Questions

Problem 3P

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Though relationships between income and environmental quality are not inevitable, there are some general trends that have been revealed. Studies show that as a country's per capita income rises a) exposure to CO2 emissions decrease. b) exposure to particulate solids wastes decrease. ) exposure to particulates and sulfur dioxide (SO2) first decrease and then increase. O d) to safe water and adequate sanitation rise. access
PRICE (Dollars per ton) 80 72 64 56 48 40 32 24 16 B Demand 0 25 50 75 100 125 150 175 200 225 250 QUANTITY (Millions of tons) Graph Input Tool Daily Demand for Pollution Rights Price 8 (Dollars per ton) Quantity Demanded (Millions of tons) 225 Suppose the government has determined that the socially optimal quantity of sulfur dioxide emissions is 125 million tons per day. One way governments can charge firms for pollution rights is by imposing a per-unit tax on emissions. A tax (or price in this case) of $ of sulfur dioxide emitted will achieve the desired level of pollution. per ton Now suppose the U.S. government does not know the demand curve for pollution and, therefore, cannot determine the optimal tax to achieve the desired level of pollution. Instead, it auctions off pollution permits. Each permit entitles its owner to emit one ton of sulfur dioxide per day. To achieve the socially optimal quantity of pollution, the government auctions off 125 million pollution permits. Given…
b) Discuss and explain the concept of positive return toscale showing it relationship with the quantity ofproduction.
10. Likewise, in the case of positive externalities there is no incentive for the private consumer to pay for any more than the benefits that they receive as individuals. However, there may also be benefits that exist for society as a whole. • Positive externalities result in an (underallcation. overallocation) of resources to the production of a product. All of the benefits associated with the product are not reflected in the (demand, supply) curve. The (demand, supply) curve lies to the (right, left) of the full-benefits demand curve. • Thus, due to the positive externalities, benefits are (underestimated, overestimated); resources are (underallocated, overallocated) where positive externalities exist. • Examples of positive externalities of production are In the case of public goods (and services), it is impossible to divide the product into individual saleable units for consumers to purchase and, additionally, the exclusion principle doesn't apply. That is, even if the product…
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DNPS9.2(a) The market for dry cleaning is reflected by the demand and supply curves (Q is in thousands): Pa = 5-Q Ps= 2 + 2Q Producing dry cleaning creates ground water pollution with a constant marginal external cost of 1.2. (Hint: Think about this graphically and algebraically like a per-unit tax.) (a) Sketch a Graph that shows the Dsoc, Spriv, Ssoc, Qopt (Societal Perspective) & Deadweight Loss (DWL) in an Unregulated Market?
PRICE (Dollars perton) 90 81 72 63 54 45 30 27 18 9 0 0 + I 40 60 80 100 120 140 160 180 200 QUANTITY (Millions of tons) 20 40 Demand Graph Input Tool Daily Demand for Pollution Rights Price (Dollars per ton) Quantity Demanded (Millions of tons) 9 180 Suppose the government has determined that the socially optimal quantity of chemical pollution is 140 million tons per day. Corrective taxes Tradable permits One way governments can charge firms for pollution rights is by imposing a per-unit tax on emissions. A tax (or price in this case) of S of chemicals emitted will achieve the desired level of pollution. (?) Now suppose the U.S. government does not know the demand curve for pollution and, therefore, cannot determine the optimal tax to achieve the desired level of pollution. Instead, it auctions off tradable pollution permits. Each permit entitles its owner to emit one ton of chemicals per day. To achieve the socially optimal quantity of pollution, the government auctions off 140…
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A local college is deciding whether to conduct a campus beautification initiative that would involve various projects, such as planting trees and remodeling buildings, to make the campus more aesthetically pleasing. For the students of the college, the visual appearance of the campus isnonrival andnonexcludable . Thus, the visual appearance would be classified as a public good. Suppose the college administrators estimate that the beautification initiative will cost $61,110. To decide whether the initiative should be undertaken, administrators conduct a survey of the college's 2,240 students, asking each of them their willingness to pay for the beautification project. The average willingness to pay, as revealed by the survey, is $20. The benefit of the beautification initiative, as suggested by the survey, is . Because the estimated benefit is than the cost, the college administrators undertake the beautification initiative. The calculation of the benefit of…
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