a).Explain why allocating property rights might help solve the inefficient outcomes generated by externalities. b).In what real-world circumstances might this approach be easier to implement and why?
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1).
a).Explain why allocating property rights might help solve the inefficient outcomes generated by externalities.
b).In what real-world circumstances might this approach be easier to implement and why?
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- A3) Consider production involving a positive extemality. Which one of the following statements is true? a) Without government intervention the market will produce excess supply. b) Marginal social cost is higher than marginal private cost. e) Marginal social benefit is less than marginal private benefit. d) A subsidy to producers could increase production to the socially optimum level. e) A Pigouvian tax could be imposed on the producer to achieve the socially optimum level of production.(a) Explain the difference between a positive externality and a negative externality and why each result in an equilibrium point that is not optimal for society. (b) which externality results in an equilibrium quantity that is higher than the optimal social quantity of a good? (c) how can the impact of the externality in part b be corrected?Answer the following questions for the given example: Using water pumps in homes (a) Does an externality exist? If so, is it positive/negative (or both) (b) Use Coase’s framework to identify the cause of the externality (c) If an externality exists, determine whether the Coase theorem applies (i.e. is it possible/feasible to assign property rights and solve the problem?). Provide reasoning. (d) If an externality exists and the Coase theorem does not apply, discuss a government/institutional solution that can mitigate the problem of externality. Provide reasoning.
- Q)What are economists most concerned with when determining the desirability of pollution abatement programs? a. the expected future costs associated with rising ocean levels b. the future savings to the health-care system from fewer environmental illnesses c. equating the marginal cost and marginal benefit of pollution abatement d. the level of greenhouse gas emissions from automobilesA) Using demand and supply diagram, describe and discuss positive externality in production of a product/service. In your discussion, explain why the existence of a positive externality leads to inefficiency. B) Consider your answer in part (a), discuss two methods that the government may use to intervene in the market to eliminate the market inefficiency. In your discussion, explain which method is preferred.Explain why externalities pose a problem for the utilitarian/invisible hand argument in favor of free market/laissez-faire capitalism. Be precise and thorough and use your own words
- Consider an economy which is heavily dependent on tourism. To boost tourist revenue, the government has decided to reclaim the sea to build a theme park at the coastal area. This has resulted in sea pollution, reduces the fish stock and threaten the livelihoods of fishermen in the vicinity. (a)Describe the type of externality exist in the scenario. Explain with a suitable diagram and highlight the area of the efficiency loss. (b)Explain the remedial action to rectify the externality problem.Free-market environmentalism has the potential to improve environmental outcomes A. Because it forces individuals to cooperate with each other toward a common goal B. Because it relies on already existing markets to address environmental issues, thereby reducing transaction costs C. Because it recognizes the importance of aligning incentives of stakeholders D. Because it rejects the constraints of the Coase Theorem E. Because its goal is to maximize corporate wealth, which promotes environmentalism and improves environmental outcomesWhich of the following represents the true economic cost of production when firms produce goods that cause negative externalities? A. the social cost of production. B. the private cost of production. C. the external cost of production. D. the explicit cost of production.
- a) What is meant by Pareto efficiency in economics? Explain. b) List two examples of market failures that are relevant for environmental economics.61) The Coase Theorem points out that externality problems can be eliminated if the number of parties involved is small and if property rights A) are granted solely to consumers. B) are granted solely to producers. C) are eliminated. D) are granted to either consumers or producers and transactions costs are low. 62) The Coase Theorem says that which of the following is necessary to lead to an efficient use of resources? A) presence of transaction costs B) existence of property rights C) government intervention D) All of the above answers are correct. 63) According to the Coase theorem, which of the following are necessary for the efficient levels of pollution to be achieved? I.Property rights are defined. II.Transactions costs are low. A) I only B) II only C) both I and II D) neither I nor II 64) Which condition(s) must exist for the Coase Theorem to hold? I.Property rights must exist. II.Transactions costs must be measurable. III.A small…1) How does market failure provide a justification for government intervention in tourism? 2) Why is community-based approach to tourism planning and why is it so difficult to implement? 3) To what extent are Dutton and Hall’s (1989) 5 mechanisms to achieve sustainable tourism development still relevant in the 21st century?
