Find the efficient level of pollution

Assignment Help Econometrics
Reference no: EM131309482

Consider the diagram below, which depicts the external marginal cost of pollution by each ton of sulfur dioxide emitted by power plants, and the marginal abatement cost of eliminating that pollution.

2193_3dc5b6ec-c85e-4a6b-97dd-ad20dd9e5659.png

a. Explain why the marginal abatement cost (or marginal benefit of pollution) curve slopes downward.

b. Find the efficient level of pollution and indicate it on your graph.

c. Firms, which care little about the damage imposed on people hundreds or thousands of miles away, have little incentive to produce the optimal amount of pollution on their own. Explain how, if regulators tax the producer $400 for each ton of pollutant emitted, power producers will have an incentive to cut emissions to exactly the socially optimal level.

d. Explain why a tax of $600 for each ton of pollutant emitted is too high a tax, and $200 per ton is too low a tax.

Reference no: EM131309482

Questions Cloud

Discuss which reasons for theoretical thinking can be apply : Review the 7 Reasons for Theoretical Thinking in Chapter Two. Find a current news article, journal article, or scholarly paper written on a theory in healthcare. Summarize the article and discuss which reasons for theoretical thinking can be app..
Find the quantity of bread produced in paris : To achieve the socially optimal output, government can use a price-based intervention. Determine the ideal measure for government to use to achieve this goal. Specify both the type of policy and its magnitude.
Changes in interest rates : Why will there be less crowding out of private spending by government spending the less sensitive consumption, investment, and net exports are to changes in interest rates?
Explain what are the major strategy and why is it important : What are the major strategies and why is it important to implement security policy's in today's organizations? Include a summary paragraph/abstract at the beginning of the report on a separate page.
Find the efficient level of pollution : Explain why a tax of $600 for each ton of pollutant emitted is too high a tax, and $200 per ton is too low a tax.
Write about connection between spirituality and meditation : Write a research paper about the connection between Spirituality and Meditation.
How your own perspective on time factor into your analysis : Think back to a meeting you attended recently-either at school or at a workplace. Did everyone arrive at the same time?
The market for spring rolls spring perfectly competitive : The market for spring rolls spring perfectly competitive, and the price of a spring rolls $3.503.50. The labor market is competitive, and the wage rate is $126.00 a day.
Calculate the total surplus to market participants : Determine the quantity of marching band music that would be produced if marching bands were forced to consider the costs they imposed on others.

Reviews

Write a Review

Econometrics Questions & Answers

  What if the optimal size is between 3 and 4

If the optimal club size is between 4 and 5, what is the smallest population beyond which eminency is always achieved? What if the optimal size is between 3 and 4?

  What is annual equivalent value of a geometrical increase

What is the annual equivalent value of a geometrically increasing series of payments which has first-year base of $30,000 increasing by 8% per year for 10 years with an interest rate of 12% compounded monthly

  What price should be set for each group

a) If the market cannot be segmented, what is the uniform monopoly price b) If the night club can charge according to whether or not the customer is a student but is limited to linear pricing

  What''s your reaction to the finance manager''s pessimism

What's your reaction to the finance manager's pessimism? What about the market manager's optimism? What implications does this have for Rob and the company?

  What is the number of degrees of freedom

Where Qx is the quantity demanded of Product X, Px is the price of X, Y is income, and r is the prime interest rate (given in decimals, e.g., 0.02 or 0.05) The standard error of each estimated coefficient is given in parentheses below it. Also, th..

  How is growing possible in the short run and in the long run

Suppose the stock of capital and the workforce are both increasing at 3 percent annually in the country of Wholand. At the same time, real output is growing at 6 percent. How is that possible in the short run and in the long run

  Determine what is the gdp of mini vans

During 2006 a leading auto manufacturer produced 20 million of minivans. However due to soaring gas prices the sale of mini vans becomes sluggish and by the end of 2006 only 16 million of mini vans are sold. what is the gdp of mini vans is

  Determine amount of consumer surplus and producer surplus

Determine the amount of consumer surplus, producer surplus and net social welfare generated in this market. Evaluate how your answer for Consumer Surplus in part B would change if QD =11000 - 500P instead?

  What will the marginal propensity to consume be

Income is 90 and savings is 2. Then income increases to 100 and consumption is 97. What will the marginal propensity to consume be?

  What is the marginal cost of producing the 21st unit

Consider the following cost equation: Total Cost (TC) = 160Q -10Q2 + 1.2Q3. What is Total Cost when the Quantity is 20?

  What is jerrys marginal cost and calculate jerrys profit

Given a numeric production schedule, you will calculate profit and make decisions about short-run profitability to answer questions relating to your calculations. Jerry's Lock Shop is a perfectly competitive firm, and Jerry is operating at his lev..

  What are the competing merits of revaluing the gdp

What are the competing merits of revaluing the GDP of other countries through the market foreign exchange rate, and purchasing power parity?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd