Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Pigouvian Tax
An economic solution to the problem was evolved as early as in the 1920s by the well- known British economist Arthur Pigou in the form of pollution tax popularly known as Pigouvian tax. According to Pigou, the social damage or the social cost imposed by a firm by its pollution activity on society may be neutralised by imposing a pollution tax on the firm. The rate of the tax, according to him is equal to the marginal environmental cost or marginal social damage by the polluting firm on society.
We explain the situation in the below diagram where MCs, is the social marginal cost while MCp, is the private marginal cost of production of a good. As more output is produced, MCs, increases with the level of pollution. The demand for the pollution good is given by the demand curve DD' (representing marginal revenue curve, MR). As per market mechanism, the equilibrium output is q1 and price is P1 where MCp = MR. Socially optimum level of output, however, is q* and price P*, where MCS = MR. If the producer were made to pay for the social costs also, equilibrium output would have been at the level q*. We observe from below diagram that the difference between MCs, and MCp, at the socially optimum level output is 'ac'. In order to internalize the externalities Pigou suggests imposition of a tax t per unit of output where t = ac. Here it is assumed that pollution emitted per unit of output remains unchanged as level of output changes.
Diagram: Pigouvian Tax
Jenna's boss has decided to pay her a one-time bonus of $5,000. She decides to save the money until she retires, 4 years from now. She contemplates two savings options. Option A is
Are there any welfare or subsidy payments that should be renewed or added? 2.What are the costs and consequences of providing the subsidies and welfare? 3.Are there any current sub
reallocation of the resources from 1 efficient point to another efficient point that cause the production of x increase and production of y decrease hold the condition of contrect
.thoery of cost.
Earlier than the Civil War, the South graded with the North and with England. It sold cotton and bought manufactured goods and food. Throughout the war, one of Lincoln's first acti
Characteristics of IS Curve
1.) In what way is insurance for medical loss/illness differ from insurance for any type of property loss?
An economy has two agents and two goods. Utilities are given by UA=min{xA,0.5yA} and UB=min{xB,0.5yB}. The total amount of X in the economy is 10. The total amount of Y is also 10.
#questioi hour classn..
Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd