+1-415-670-9189
info@expertsmind.com
How much compensation would be required
Course:- Econometrics
Reference No.:- EM131134534




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Econometrics

Options for Abating Noise Pollution. Janis enjoys loud music and is willing to pay $9 for the first song and $1 less for each succeeding song ($8 for the second, $7 for the third, and so on). For her dormmates, the external cost from the noise pollution is $4 per song. (Related to Application 3 on page 670.

a. Suppose initially the price of songs is $0. How many songs will Janis play? Illustrate with a graph.

b. Suppose the government imposes a pollution tax of $4 per song. How many songs will Janis play? Compute the loss in consumer surplus from the tax, which increases the price of songs from $0 to $4Janis could soundproof her room, eliminating the noise pollution and her responsibility to pay the pollution tax. If the soundproofing costs $30, is it worthwhile?

c. Janis could compensate her dormmates for each unit of noise pollution each song played. How much compensation would be required? From her perspective, is paying compensation better than paying the tax, worse, or the same?




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Econometrics) Materials
Why does the varieties model of technological change from section 6.1 exhibit a scale effect in the sense that the growth rate rises with the aggregate quantity of labor, L?
Suppose your designing your computer, with the same benefits from additional RAM described in the proceeding problem. How much RAM do you desire if the price of RAM falls to
How would you feel about this offer if you were a shareholder? What are the implications for moral hazard, efficiency, and risk sharing? Can their decision be viewed as a fo
Studies indicate that the price elasticity of demand for cigarettes is about 0.4. If a pack of cigarettes currently costs $5 and the government wants to put a tax on it to r
Frisbee manufacturers persuade the government that Frisbee production improves scientists' understanding of aerodynamics and thus is important for national security. A conce
A firm wants to lease some land from you for 20 years and build a warehouse on it. As your payment for the lease, you will own the warehouse at the end of the 20 years. If t
Can you identify any limitations to this assistance? What insights can be found from a comparison of Haiti and the DR for the potential role of environment in economic devel
For savers, how will the income effect of a higher interest rate affect current saving? How will the substitution effect of a higher interest rate affect current savings?