Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 7P
(a)
To determine
Cost and benefit of water use during a drought and causation for the failure of the order to reduce the use of water in
(b)
To determine
Incentives to make individuals save water.
(c)
To determine
Causation of relatively lesser water consumption reduction by wealthier homeowners.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
10
8
6
4
3
P ($)
SB
1
5 6 7 8 9 10
The graph above shows a market with an externality. Refer to the graph to answer the following
questions:
. In this market the externality is
♦
. If the government does not interfere in the functioning of this market, the quantity traded in the
market is
and the price is $
. One way for the government to move the market to the efficient point is to implement a
corrective
in the amount of $
per unit.
2
S.
A town is in financial trouble and is considering imposing user fees for certain services.
The current list consists of fire protection, police, schools, parks, and libraries. You are
hired to advise them on this from an economist's perspective. For which of these would it
be most (least) reasonable to use such an approach to funding? Explain your choices by
discussing the effectiveness of a fee on each relative to the concept of a "Public Good" as
defined in economics and whether such user fees would provide total funds consistent with
the overall social benefit of each?
6.
Compare placing a tax on gasoline to a mandated increase in the average fuel efficiency of each car in terms of reducing the usage of gasoline, reducing greenhouse gases, and also providing consumers with choice in their vehicle selection. Analyze the impact on consumers, service stations, and car manufacturers.
Chapter 1 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
Knowledge Booster
Similar questions
- Carbon dioxide emissions have been linked to global warming. The following table lists some possible public policies aimed at reducing the amount of carbon dioxide in the air. For each policy listed, identify whether it is a command-and-control policy (regulation), tradable permit system, corrective subsidy, or corrective tax. Command- and- Tradable Control Permit Corrective Corrective Public Policy Policy System Subsidy Тах Trees take carbon dioxide out of the air and convert it to oxygen, so the government funds a tree-planting initiative by offering $400 to any citizen who plants a tree. The government orders every factory to adopt a new technology, which reduces carbon- dioxide emissions into the atmosphere. The government limits total carbon-dioxide emissions by all factories to 150,000 tons per year. Each individual factory is given the right to emit 180 tons of carbon dioxide, and factories may buy and sell these rights in a marketplace. The government charges factories $400 for…arrow_forwardCarbon dioxide emissions have been linked to worsening climate conditions. The following table lists some possible public policies aimed at reducing the amount of carbon dioxide in the air. For each policy listed, identify whether it is a command-and-control policy (regulation), tradable permit system, corrective subsidy, or corrective tax. Public Policy Command-and-Control Policy Tradable Permit System Corrective Subsidy Corrective Tax The government limits total carbon-dioxide emissions by all factories to 130,000 tons per decade. Each individual factory is given the right to emit 170 tons of carbon dioxide, and factories may buy and sell these rights in a marketplace. Trees take carbon dioxide out of the air and convert it to oxygen, so the government funds a tree-planting initiative by offering $480 to any citizen who plants a tree. The government orders every factory to adopt a new technology, which reduces…arrow_forward1. Illustrate and explain the simultaneous impact of TRAIN law on the lower income group’s consumption of instant coffee. Compare and contrast the equilibrium price and quantity before and after the implementation of the law. 2. Illustrate and explain why there are very little clean Public Comfort Rooms that are free or are donation-based. Provide a possible solution to this problem (15 pts) (hint: analyze public CR as a positive externality) 3. Do you think that the TRAIN law was/is successful as a pro-poor taxation program? Why or why not?arrow_forward
- What type of control, if any, does the President have over the EPA (Environmental Protection Agency)?arrow_forwardSuppose a political candidate criticizes a government pollution permit policy that she says lets corporations buy and sell the right to pollute. She argues that our right to breathe and the future of our planet require real regulation instead of this type of government policy. Which of the following describes why most economists would disagree with her statement? A corrective tax would result in a more efficient outcome than either tradable permits or government regulation would. A free market in tradable pollution permits is typically more efficient than government regulation. Clean air is a fundamental right, and government regulation will allow too much pollution. The environment is so important that it should be protected as much as possible, regardless of the cost.arrow_forwardThe people of Chingola district a town in the Copperbelt province of Zambia are concerned over the activities of the local investor whose copper mining activities have resulted in the pollution of the Kafue river. Some commentators have argued that there is need for Government to come up with a tax to deal with this externality. Using your knowledge of Public sector economics, Identify the type of externality and how large tax rate should the government use in order to eliminate this externality? Why does this tax rate work? Use a diagram to illustrate your answer.arrow_forward
- Problem 6-9 Demand change effects on government revenue The market for Titanium has supply given by P = Q and demand given by P = 12 - Q. The government introduces a tax of €3/g. Yet, the market experiences growth in the demand for titanium because of new-found medical uses. The new demand curve is P= 13 - Q. Find the change in government tax revenue due to the increased demand for titanium. (Round your answer to one decimal place.) € millionarrow_forwardPolicymakers are provided data about the private and social benefits of a good being sold in the market. Quantity Private MB ($) Social MB ($) 4 9. 5 4 7 6. 2 5 7 3 What is the size of the externality? If the externality is positive, enter a positive number. If negative, make it a negative number. Enter numeric value Given this data, policymakers must decide whether to address the associated externality with a subsidy or a tax. As their economic consultant, which of the two policy tools would you recommend? a subsidy a taxarrow_forwardIf allocating water through non-price means generally harms society, can you suggest why governments often do this?arrow_forward
- Distinguish between a carbon-tax and a cap-andtrade strategy for reducing carbon dioxide and other so-called greenhouse gases (that are believed by many scientists to be causing global warming). Which of the two strategies do you think would have the most political support in an election in your home state? Explain your thinking.arrow_forward2A. he Trump administration will not impose any limits on perchlorate, a toxic chemical compound that contaminates water and has been linked to fetal and infant brain damage. The decision by Andrew Wheeler, the administrator of the E.P.A, appears to defy a court order that required the agency to establish a safe drinking-water standard for the chemical by the end of June. The policy, which acknowledges that exposure to high levels of perchlorate can cause I.Q. damage but opts nevertheless not to limit it, could also set a precedent for the regulation of other chemicals, people familiar with the matter said. E.P.A. intends in the coming days to send a federal register notice to the White House for review that will declare it is "not in the public interest" to regulate the chemical. Which of the following statements about water and water pollution are true? PICK ALL THAT APPLY Over time, bacteria can break perchlorate down into harmless bacteria, but if perchlorate is emitted faster than…arrow_forwardSuppose the demand and supply curve for crude oil at any given period is: Pd= =380−3Q and Ps=28+1Q Where price is measured in dollars and quantity is measured in barrels. Furthermore, for each barrel of oilproduced, there is $32 worth of negative externality. The market currently unregulated and produces 88 barrels of oil and the market price is $116. Externality, Part A: What is the Total Social Welfare before government regulation?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education