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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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The table below shows the estimated annual total costs and benefits of maintaining Asian elephant populations in their natural habitat.
Under an agreement with U.S. regulators, American Electric Power Company of Columbus, Ohio, has agreed to offset part of its million metric tons of carbon dioxide emissions by paying another company to lay plastic tarps. These tarps cover farm lagoons holding rotting livestock wastes that emit methane gas times more damaging to the atmosphere than carbon dioxide. The annual methane produced by a typical pound cow translates into about metric tons of carbon dioxide emissions per year.
a. How many cows' worth of manure would have to be covered to offset the carbon dioxide emissions of this single electric utility?
b. Given that there are about 9 million cows in the United States in a typical year, what percentage of its carbon dioxide emissions could this firm offset if it paid for all cow manure in the entire nation to be covered with tarps?
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 pat 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?
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 bymillion for each tiger population increment in the table. What is the new socially optimal population of wild tigers?
Consider the diagram in Problem , and answer the following questions.
a. Suppose that a new technology for reducing water pollution generates a reduction in the marginal cost of pollution abatement at every degree of water cleanliness. After this event occurs, will the optimal percentage degree of water cleanliness rise or fall? Will the cost incurred for the last unit of water cleanup increase or decrease? Provide a diagram to assist in your explanation.
b. Suppose that the event discussed in part (a) occurs and that, in addition, medical studies determine that the marginal benefit from water pollution abatement is higher at every degree of water cleanliness. Following both events, will the optimal percentage degree of water cleanliness increase or decrease? In comparison with the initial optimum, can you determine whether the cost incurred for the last unit of water cleanup will increase or decrease? Use a new diagram to assist in explaining your answers.
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