Suppose the only two meat dishes consumed in the United States are flounder and beef. What are the likely effects in these markets of a rumor of a major water pollution problem discovered in the commercial fishing waters? Assume that production resources cannot be shifted between sectors.
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- Suppose that there is an unregulated market for pesticides. When the factories produce pesticide, they also create waste that they dump into a lake on the outskirts of town. The market for pesticides is given by the following equations (note that Q is in tons, and P is in 1000s of dollars: Demand: P = 8 – Q Supply: P = Q Marginal Social Cost: P = 2 + Q Now suppose the government levies a pollution tax. What is the tax per ton of pesticide that will achieve the socially efficient outcome? If the production of pesticides at any level produces pollution, why is the socially optimal quantity not zero?The diagram to the right shows the perfectly competitive market for honey. The demand curve shows the marginal benefit to society of consuming an extra unit of honey. The supply curve shows the marginal costs of producing an extra unit of honey. However, suppose that, as a by-product to producing honey, honeybees pollinate flowers, allowing more flowers to grow and bloom. Suppose that for each unit of honey produced, one unit of flowers is also created, providing an external benefit of $6. Use the line drawing tool to draw and label the social marginal cost curve. (Make sure that the curve's one end extends to the output level 18 and it crosses the demand curve.) Carefully follow the instructions above, and only draw the required objects. C Price of Honey ($) 20.00- 18.00- 16.00- 14.00- 12.00- 10.00- 8.00- 6.00- 4.00- 2.00- 0.00- 0 -N 2 4 6 8 10 12 14 Quantity of Honey S = MCp 16 D = MB 18 20In Guadeloupe and Martinique, the use of pesticide chlordecone on banana plantations led to devastation of fishing communities downstream. Which of the following are possible solutions? 1) Force the pesticide users to bear the costs incurred by the fishing communities. 2) Ban the use of the pesticide. 3) Let the banana producers also own the fisheries. 4) Regulate the use of the pesticide.
- The term external to the exchange. refers to a market exchange that affects a third party who is outside or a) private costs b) externality c) market failure d) social costsSuppose a municipality votes to reduce the combined pollution introduced by three local companies. Presently, each firm cre the area, for a total of 12 pollution units. The government can reduce total pollution in the area to 6 units by choosing between the following two methods: Methods to Reduce Pollution 1. The government imposes pollution standards using regulation. 2. The government issues tradable pollution permits. The costs faced by each firm are different, so it is more difficult for some firms to reduce pollution than others. The following table shows the cost faced by each firm to eliminate each unit of pollution. Assume that the cost of eliminating all 4 units of pollution (that is, reducing pollution to zero) is prohibitively expensive for all three firms. Firm Firm A Firm B Firm C First Unit of Pollution (Dollars) 55 650 90 Method 1: Regulation Cost of Eliminating the... Second Unit of Pollution (Dollars) 70 800 125 Third Unit of Pollution (Dollars) 110 1,500 180 Next,…a) Given that Vincyland is a small country, thorougly examine the partial equilibrium welfare effects associated with imposing a tariff on their import good given that the prediction of the imported good yields a positive externality.(use theories) b) Should a subsidy have given a more desirable solution. Please explain thorougly Assume that Trinbago is a small country that produces wine and motor vehicles, where motorvehicles are capital intensive. Trinbago is also capital intensive, and the standard Heckscher -Ohlin(H-O) assumptions hold. The other country in the model is Vincyland.
- Consider the supply of soybeans in South America and the demand for soybeans in China. Draw a graph in which you show the current market equilibrium price of soybeans and quantity of soybeans traded. Include the curve that shows the true social costs of soybean production. Show the socially optimal amount of soybeans traded. Show the price that should really be charged for soybeans to ensure that production moves to the socially optimal level. Ensure that you label your graph correctly (all curves, axes, prices and quantities labeled). Show the deadweight loss of soybean production. What intervention could be used to change the market price for soybeans to the level that would move the quantity of soybeans traded to the optimal level? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.3. A small country can import a good at a world price of 10 per unit. The domestic supplycurve of the good is S = 20 + 10P , D = 400 - 5P.In addition, each unit of production yields a marginal social benefit of 10.Now, suppose demand and supply are exactly as described in problem 3, but there is nomarginal social benefit to production. However, for political reasons the government counts adollar's worth of gain to producers as being worth $3 of either consumer gain or governmentrevenue. Calculate the effects on the government's objective of a tariff of 5 per unitCanada has not allowed for the bulk exportation of water. The current price for water for Canadian consumers is $40 per tonne (typically delivered via an underground pipe to your house/business!) and Canadians consume 3 M Tonnes/yr. Unfortunately, climate change has resulted in droughts in California and other Southern states. To help meet this need and make a profit of course, Canada has decided to allow international trade in water. The North America (or world) price for water is currently $60/tonne. (Hint the supply lines does not move..) Explain in words a. what will happen to production (supply) and Canadian demand for water b. the effect on the producer and consumer surplus C. Any imports/exports
- Explain why zoning laws, which allow certain land uses only in specifific locations, might be justifified in dealing with a problem of negative externalities. Explain why tax breaks to businesses that set up in areas of high unemployment might be justified in view of positive externalities. Explain why excise taxes on beer might be justifified in dealing with a problem of external costs.Discuss how trade can generate both positive and negative externalities. Use relevant diagrams to support your answer.Question 1.6 Suppose there are two firms (polluters) and their estimated emission reduction costs are given as follows: MAC, =120 – Eq and MAC, = 200 – 2Eg. The environmental regulatory agency introduced a TEP market and allowed both firms to emit 50 units of emission per month. What would be the price of emission trade and how many permits will be traded? Show your calculations