Exam 17: The Economics of Environmental Protection

A paper mill discharges chemicals into a river which pollutes the shores of a downstream resort area.The private marginal cost,social marginal cost,and marginal benefit associated with the production of paper are given by the following equations: MCP = 5 + Q MCS = 10 + 2Q MB = 35 - 0.5Q. The marginal external cost is ________ throughout the output range.

The figure below shows the marginal benefit to consumers,MB,the marginal cost to private firms,MCP,and the marginal cost to society,MCS,at each level of output of some good. FIGURE 17-1 -Refer to Figure 17-1.The price that leads consumers to demand the socially optimal quantity of output is

The table below shows the marginal benefit and marginal cost of pollution abatement for an economy. TABLE 17-1 -Refer to Table 17-1.Suppose a public authority has the mandate to maximize social welfare by choosing the appropriate amount of pollution abatement.The optimal amount of pollution abatement is ________ units and implies a ________ amount of pollution remaining

The diagram below shows the marginal costs of pollution abatement for two firms,Firm 1 and Firm 2. FIGURE 17-5 -Refer to Figure 17-5.How much pollution abatement would Firm 2 undertake if faced with an emissions tax of $20 per unit of emissions?

The diagram below shows the marginal cost of pollution abatement for two firms,Firm X and Firm Y. FIGURE 17-6 -Refer to Figure 17-6.Ignore the horizontal line at t.If the government wanted to impose an emissions tax,efficiency requires that it

Consider a coal-fired electric-power plant that is operating under a cap-and trade-system.If its marginal cost of pollution abatement is $5 per unit and the price of the permit is $3 per unit,this firm will

The diagram below shows the marginal cost of pollution abatement for two firms,Firm X and Firm Y. FIGURE 17-6 -Refer to Figure 17-6.Firms X and Y have an emissions tax of $t imposed on each unit of pollution they produce.If Firm X chooses to abate QX units of pollution,the total cost of its abatement is

Consider the following equation: Where GHG = world annual emissions of greenhouse gases Energy = world annual amount of energy consumed GDP = worldʹs annual gross domestic product Suppose GHG emissions increased by 10% between 2011 and 2015,a period when GDP increased by 5% and Energy/GDP was constant.We can conclude that GHG/Energy over the same period

A paper mill discharges chemicals into a river which pollutes the shores of a downstream resort area.The private marginal cost,social marginal cost,and marginal benefit associated with the production of paper are given by the following equations: MCP = 5 + Q MCS = 10 + 2Q MB = 35 - 0.5Q. The marginal external cost at the competitive free-market equilibrium is

The diagram below shows the marginal costs of pollution abatement for two firms,Firm 1 and Firm 2. FIGURE 17-5 -Refer to Figure 17-5.Suppose the government requires that each firm abate pollution to the level Q 3.The outcome would be efficient because

The diagram below shows the marginal cost of abatement for each of two firms,A and B.Each firm is initially abating Q 0 units of pollution. FIGURE 17-7 -Refer to Figure 17-7.Suppose that a system of tradable pollution permits is introduced into this market and the equilibrium permit price is p^∗.Firm A will sell permits to Firm B because

The marginal benefit of reducing pollution in some industry may be expected to

When considering an entire industry,the marginal benefit of reducing pollution is expected

The figure below shows the marginal benefit to consumers,MB,the marginal cost to private firms,MCP,and the marginal cost to society,MCS,at each level of output of some good. FIGURE 17-1 -Refer to Figure 17-1.A negative externality is depicted because the

Consider global greenhouse-gas emissions.Suppose that in 2016,greenhouse gases emitted per unit of energy consumed decreased by 2%,energy use per unit of GDP decreased by 2%,and world GDP increased by 4%.What will be the approximate change in global greenhouse gas emissions in 2012?

Consider two firms,A and B,that must engage in pollution abatement.If Firm A has a lower marginal cost of pollution abatement than Firm B,then

The diagram below shows a market for tradable pollution permits. FIGURE 17-8 -Refer to Figure 17-8,which depicts the market for tradable pollution permits.The equilibrium price p*

Direct controls for reducing pollution can be criticized from an economic viewpoint as

Zero pollution is almost surely NOT a desirable social goal because

Suppose the government imposes an emissions tax of $t on each unit of pollution produced by a firm.Under which of the following circumstances would the tax rate be set too high to achieve allocative efficiency?