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: MC_P = 5 + Q MC_S = 10 + 2Q MB = 35 - 0.5Q. The marginal external cost is ________ throughout the output range.

The social marginal cost of the production of snowmobiles

Federal regulation aimed at reducing greenhouse-gas emissions by setting some maximum level of emissions from each firm

The socially optimal level of output of any good is the quantity where all marginal costs of production,private plus external,equal the

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 Firm 1 and Firm 2 are each abating Q₃ units of pollution.If the government imposed an emissions tax of $40 per unit of emissions,

The diagram below shows the private and social marginal costs (MC_P and MC_S)and the social marginal benefits (MB_S)of producing disposable diapers. FIGURE 17-2 -Refer to Figure 17-2.The net social benefit derived from the production and use of the last unit of disposable diapers is

The diagram below shows the private and social marginal costs (MC_P and MC_S)and the social marginal benefits (MB_S)of producing disposable diapers. FIGURE 17-2 -Refer to Figure 17-2.The net social benefit derived from the production and use of disposable diapers is

The figure below shows the marginal benefit to consumers,MB,the marginal cost to private firms,MC_P,and the marginal cost to society,MC_S,at each level of output of some good. FIGURE 17-1 -Refer to Figure 17-1.The price that would occur in a competitive market in the absence of government intervention is

If residential garbage collection were financed by charging households a fee per unit of garbage collected,rather than through general property taxation or a flat fee,you would expect

The marginal benefit of reducing pollution and the marginal cost of reducing pollution are given by the following equations: MB = -2 + 18,and MC = 2 + 2,where U is the number of units of pollution abatement.What is the number of units of pollution abatement after which there is no further social benefit from reducing pollution?

Two firms,A and B,are legally required to reduce their toxic emissions.If Firm A's marginal cost of abatement is $5 and Firm B's marginal cost of abatement is $3,

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

In general,the economist's view on allocating resources to reduce pollution is that

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

In 2006,Professor Nicolas Stern of the United Kingdom stated "Climate change is the greatest market failure the world has ever seen." Which of the following statements describes the biggest challenge to efforts to begin correcting this market failure?

Suppose a firm producing roof shingles imposes a negative externality on the surrounding area due to the noxious fumes emitted from the plant.The private marginal cost,social marginal cost and marginal benefit associated with the production of the shingles are given by the following equations: MC_P = 5 + 2Q MC_S = 10 + 3Q MB = 50 - Q The allocatively efficient level of output is ________ units.

Economists often argue that a system of tradable pollution permits is cost-effective because

A paper mill discharges chemicals into a river which affect the shores of a downstream resort area.The private cost,social cost,and marginal benefit associated with the production of paper are given by the following equations: PMC = 5 + Q,SMC = 10 + 2Q,and MB = 35 - 0.5Q.What level of emissions tax (dollars per unit of output produced)would provide the paper mill with the incentive to produce at the allocatively efficient level of output?

When designing a policy to reduce polluting emissions,policymakers are unlikely to know with certainty what the marginal cost of abatement is for each firm.If an emissions tax ($t per unit of emissions)is imposed,then policymakers

Suppose the government imposes a tax for each unit of pollution that a firm produces.The firm will