Case: A beekeeper lives adjacent to an apple orchard. • The orchard owner benefits from the bees because each hive pollinates about one acre of apple trees. The orchard owner pays nothing for this service, however, because the bees come to the orchard without his having to do anything. Because there are not enough bees to pollinate the entire orchard, the orchard owner must complete the pollination by artificial means: o At a cost of $10 per acre of trees o Beekeeping has a marginal cost MC = 10 +5Q, ▪ where is the number of beehives. o Each hive yields $40 worth of honey. Questions: (d) Is a Beekeeper a Price-Taker or a Price-Maker? (e) Why?

Case: A beekeeper lives adjacent to an apple orchard. • The orchard owner benefits from the bees because each hive pollinates about one acre of apple trees. The orchard owner pays nothing for this service, however, because the bees come to the orchard without his having to do anything. Because there are not enough bees to pollinate the entire orchard, the orchard owner must complete the pollination by artificial means: o At a cost of $10 per acre of trees o Beekeeping has a marginal cost MC = 10 +5Q, ▪ where is the number of beehives. o Each hive yields $40 worth of honey. Questions: (d) Is a Beekeeper a Price-Taker or a Price-Maker? (e) Why?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter12: Environmental Protection And Negative Externalities

Section: Chapter Questions

Problem 43P: A city currently emits 15 million gallons (MG) of raw sewage into a lake that is beside the city....

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Similar questions

What is a marketable permit and what incentive does it provide for a firm to account for external costs?
Suppose you want to put a dollar value on the external costs of carbon emissions from a power plant. What information or data would you obtain to measure the external [not social] cost?
How can high-income countries benefit from covering much of the cost of reducing pollution created by low-income countries?
As the extent of environmental protection expands, would you expect marginal costs of environmental protection to rise or fall? Why or why not?
Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once we accounted for both the private and additional external costs, the market price increased by only 50. If the external costs were 100 why did the price only increase by 50 when we accounted for all costs?
What are better-defined property rights and what incentive do they provide to account for external costs?
Identify the following situations as an example of a negative or a positive externality: You are a birder (bird watcher), and your neighbor has put up several birdhouses in the yard as well as planting trees and flowers that attract birds. Your neighbor paints his house a hideous color. Investments in private education raise your countrys standard of living. Trash dumped upstream flows downstream right past your home. Your roommate is a smoker, but you are a nonsmoker.
Suppose that Sonys R. Is this a private or social benefit?
Is zero pollution possible under a marketable permits system? Why or why not?
As the extent of environmental protection expands, would you expect the marginal benefits of environmental protection to rise or fall? Why or why not?
A city currently emits 15 million gallons (MG) of raw sewage into a lake that is beside the city. Table 12.13 shows the total costs (TC) in thousands of dollars of cleaning up the sewage to different levels, together with the total benefits (TB) of doing so. Benefits include environmental, recreational, health, and industrial benefits. Using the information in Table 12.13 calculate the marginal costs and marginal benefits of reducing sewage emissions for this City. What is the optimal level of sewage for this city? How can you tell?
In a market without environmental regulations, will the supply curve for a film account for private costs, external costs, both, or neither? Explain.