Use the foll Figure: Determining Externalities 60 e=50 d = 45 SC= 40 Price and Costs ($) b=20 -10 to answer questions I I g Ss (MSC) 4 5 Quantity (thousands) Sp (MPC) D
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- 109 83 35 B 18 DE 223 634 925 1374 Emissions Consider the figure above. If the government imposes a tax of $83 per unit of emissions, then what areas represent the total cost of abatement?c) External costs in T-shirt production According to the World Wildlife Fund (WWF), it takes 2700 litres of water to produce one T-shirt. Water is used not only to grow cotton but also to dye clothing. Cotton growers use pesticides and chemicals that pollute the water. The pesticides and chemicals that remain in the environment harm animals and plant life. The WWF has been working with governments to help reduce this pollution. It advises them to introduce more regulation and to fine companies that pollute. Clothing manufacturers argue that this will add to their costs and mean they will supply less. This may mean they employ fewer people and will help reduce water pollution as less clothing is being manufactured. Fines will punish those that pollute while also earning the government revenue it can use to clean up the pollution. The fines must also be large enough to persuade firms to stop polluting. With reference to the information given in *External costs in T-shirt production' and…Explanation it correctly Q)Is nutella positive externalities or negative?
- Marginal Benefit (MB) MBBETA to Firm MBALPHA Tax = $100 25 50 75 100 Emissions (tons) Figure 16.5 Figure 16.5 shows the marginal benefits of emitting pollution for the only two chemical companies in an industry, Alpha Chemicals and Beta Chemicals. Before any tax on pollution emissions is imposed, each company views pollution as being free. Refer to Figure 16.5. The government decides to impose a tax on pollution of $100 per ton of emissions. Which of the follow are true? (Select all that are true) O a. As a result of the tax, the total emissions will decrease by 50 units O b. As a result of the tax, both firms will decrease emissions by the same amount O c. As a result of the tax, Alpha will cut more emissions than Beta O d. Before the tax, Beta produced more emissions than Alpha O e. The amount of tax collected is $2500 O f. After the tax, Beta will produce 50 tons more than Alpha Og. The tax was intended to decrease production by 50 units for each firm. O h. As a result of the tax,…Price, Cost 998760 2009 201 10 1 2 3 Private Cost Social Cost Demand 6 7 8 9 10 4 5 Quantity (a) Give a definition of a negative externality and explain how it arises in a market. D (b) Refer to the graph above. If the government does not intervene in this market, what is the free market equilibrium? Is it socially efficient? Explain (c) What kind of government intervention is required in this case? Explain how it will change the market outcomPRICE (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…
- 22277 WWW a 39 36 63OTI52963 33 30 27 24 21 18 15 12 12 AIB CIB 4 5 6 DIF ΕΙ O It shows a positive consumption externality. O Deadweight loss is D+F. OIt shows a negative consumption externality 7 S = Social Cost Social Benefit 89 10 Quantity Refer to the graph above: The graph above shows a market with an externality. Which of the following statements is correct? O Deadweight loss is A+B.Describe 5 five negative externalities arising from the consumption and disposal of plastic bottlesExternalities Quantity 0 5 10 15 20 25 30 Private Marginal Cost (PMC) 25 35 40 50 120 External Cost 30 70 75 100 Social Marginal Cost (SMC) 90 85 105 140 170 Page 1 e
- uestion 25/28 > NEXT A BOOKMARK Public Goods are used by all members of society, but sometimes they are overused and lead to things like air pollution, overcrowded schools, and congested roads. These things are known as Negative Externalities B Positiv Externalities Free Riders DConsequences DELL 女 esc -> ! #3 $4 & 1 4. 6. 7 W e r t y f h k a S n X C O O O O17-4 Outline government policies designed to promote the produc- tion and consumption of goods that generate positive externalities9. (Positive Externalities) The value of a home depends in part on how attractive other homes and yards in the neighborhood are. How do local zoning ordinances try to promote land uses that generate external benefits for neighbors?Why is the presentaion of corparate results increasingly accompanied by the presentation of a socially responsible bussines report. Provide 3 reasons
