Chapter 31: Q. 31.2LO (page 692)
Explain how economists can conceptually determine the optimal quantity of pollution.
Short Answer
The lowest concentration of pollutants is whether it was prior civilization exacerbated it.
Chapter 31: Q. 31.2LO (page 692)
Explain how economists can conceptually determine the optimal quantity of pollution.
The lowest concentration of pollutants is whether it was prior civilization exacerbated it.
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Get started for freeWhy might allowing profit-maximizing firms to manage the hunting of particular endangered animals potentially help to ensure the animals' species would not disappear? (Hint: Would a company continue to generate profits from selling hunting rights if it allowed hunters to kill all of the animals that it manages?)
One possible method for reducing emissions of greenhouse gases such as carbon dioxide is to inject the gases into deep saltwater-laden rock formations, where they would be trapped for thousands of years. Suppose that the federal government provides a fixed per-unit subsidy to firms that utilize this technology in West Virginia and other locales where such rock formations are known to exist.
a. Consider the effects of the government subsidy on the production and sale of equipment that injects greenhouse gases into underground rock formations. What happens to the market clearing price of such pollution abatement equipment?
b. Who pays to achieve the results discussed in part (a)?
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The following table displays hypothetical annual total costs and total benefits of conserving wild tigers at several possible worldwide tiger population levels.
a. Calculate the marginal costs and benefits.
b. Given the data, what is the socially optimal world population of wild tigers?
c. Suppose that tiger farming is legalized and that this has the effect of reducing the marginal cost of tiger conservation by million for each -tiger population increment in the table. What is the new socially optimal population of wild tigers?
The market price of insecticide is initially per unit. To address a negative externality in this market, the government decides to charge producers of insecticide for the privilege of polluting during the production process. A fee that fully takes into account the social costs of pollution is determined, and once it is put into effect, the market supply curve for insecticide shifts upward by per unit. The market price of insecticide also increases, to per unit. What fee is the government charging insecticide manufacturers?
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