Chapter 11: Problem 38
How can high-income countries benefit from covering much of the cost of reducing pollution created by low-income countries?
Chapter 11: Problem 38
How can high-income countries benefit from covering much of the cost of reducing pollution created by low-income countries?
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Get started for freeConsider two approaches to reducing emissions of \(\mathrm{CO}_{2}\) into the environment from manufacturing industries in the United States. In the first approach, the U.S. government makes it a policy to use only predetermined technologies. In the second approach, the U.S. government determines which technologies are cleaner and subsidizes their use. Of the two approaches, which is the command-and-control policy?
Show the market for cigarettes in equilibrium, assuming that there are no laws banning smoking in public. Label the equilibrium private market price and quantity as \(\mathrm{Pm}\) and \(\mathrm{Qm}\). Add whatever is needed to the model to show the impact of the negative externality from second-hand smoking. (Hint: In this case it is the consumers, not the sellers, who are creating the negative externality.) Label the social optimal output and price as Pe and Qe. On the graph, shade in the deadweight loss at the market output.
What is command-and-control environmental regulation?
Is zero pollution an optimal goal? Why or why not?
What is the difference between private costs and social costs?
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