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Question 4:
Q4 a) Why do externalities lead to inefficient outcomes? Explain why allocating property
rights might help solve this problem.
Q4 b) In what real-world circumstances might this approach be easier to implement and
why?
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- Define (a) externalities and (b) sunk costs, andthen give examples of each that might be involvedin a proposal by an energy company to build anew coal-fired electric power generating unit. Howwould these factors be worked into the analysis?d. What is the socially optimal level of emissions for the industry per month? What would be the resulting total abatement cost per month? Total damage per month? Total social cost per month? e. If environmental authorities wished to control pollution in the industry by imposing an emission tax on pollution, what would be the optimal tax rate per ton of emissions? At this rate, how many tons of pollutants would the industry emit per month? What is the total tax bill to be collected per month? What would be the resulting total abatement cost per month?A negative externality results when a 3rd party is negatively impacted by a transaction they were not involved in. In these situations, the than the marginal private cost. On the other hand, when a 3rd party is is higher positively impacted through a positive externality, are higher than Options: marginal social cost marginal private cost marginal private benefits marginal social benefits
- For each of the following statements indicate if there is/could be an externality problem. Explain why or why not. lf there is, what type is it (positive, negative or both)? Determine if the Coase's theorem will be a perfect solution to the problem. Explain why or why not a. Carbon emission from vehicles. b. Your hostel neighbor throwing an awesome, but loud party. C. Completing your university degree. d. A mobile phone rings loudly in the class.A ng.cengage.com/static/nb/ui/evo/index.html?deploymentld%3598281247957E 1Gmail E eAccount Quick Car.. B Calendar | Navigate Main Street Comm. 劉 Ta « CENGAGE MINDTAP Homework (Ch 10) Back to Assignment Atempts Keep the Highest/3 Tools 7. Correcting for negative externalities - Taxes versus tradablepermits Power stations emit sultur dioxide as a waste product. This generates a cost to society that is not paid for by the firm; therefore, pollution is a ps negative externality of power production. Suppose the u.S. government wants to correct this market failure by getting firms to internalize the cost of pollution. To da this, the government can charge firms for pollution rights (the right ta emit a given quandity of sulfur dioxide). The following graph ps shows the daly demand for polution rights. Lise the graph input tool to hel you answer the fallowing questions. You wit not be praded on any changes you make to this graph. Note: Once you enter a value in a white feld, the graph and any…Solve D) and last part only in typed answer You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 3Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost is MCInternal = 14Q. Instruction: Round your answers to the nearest two decimal places. a. What is the socially efficient level of output? units b. Given these costs and market demand, how much output would a competitive industry produce? units c. Given these costs and market demand, how much output would a monopolist produce? units d. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output. Instructions: You may select more than one answer. Click the box with a check mark for the correct answers and click twice to empty the box for the wrong answers. You must click to select or deselect each option in order to receive full credit.…
- Give typing answer with explanation and conclusion Why the market tends to fail when dealing with environmental issues? It is said many externalities in environmental economics have features that are similar to that of public goods. We know that the provision of some public goods such as lighthouse can be solved through the market rather effectively. What makes environmental goods such as clean air different from other public goods such as lighthouse? Why is it more difficult to solve the provision of clear air through the market?2a) Livestock and poultry farming are some of the largest contributors of ammonia emissions. Ammonia has been shown to interact with other pollutants to form ammonium salts that negatively impact air quality and adversely impact human breathing. As a result, economists might suggest that animal products have an associated _________ externality? 2b) Draw the private cost, private benefit, social cost, and social benefit curves in the market for the animal products. If any of the curves are the same, label the curve as both. 2c) Is there market failure if the market runs freely? If so, is the socially optimal quantity of animal products higher or lower than the market outcome? 2d) Provide a policy suggestion that would help to correct any market failures that arise due to this externality. Explain why this would be effective. Can someone please help me and explain this to me please? Thank you so much in advance!!!Market-based environmental policy instruments (e.g., carbon tax or tradeable permits) arecentral to national strategies aiming to mitigate environmental degradation. Choose carbon tax as your market-based environmental policy instrument.ii. Provide a formal (algebraic) evaluation of carbon tax's cost-effectiveness.
- What do you understand by externalities? Why do they have to be addressed for sustaining economic activity or human wellbeing? A private or a market mediated approach to address externalities may not always be adequate in resolving the issue, therefore a recourse to public sector solutions is inevitable? Give suitable examples in elaborating your answer.11 When performing a benefit cost analysis of different options to provide clean water to a community, the option that should be chosen is the option that maximizes the benefit to cost ratio. True or False?(a) Explain what is meant by command-and-control in terms of a demand side climate change policy. What are the pros and cons of this as a poliey option? (b) Using a diagram, explain how a carbon tax could help reduce pollution. (c) Using a diagram or diagrams, explain how a cap-and-trade scheme could result in pollution reduction.
