Chapter 12: Problem 35
From an economic perspective, is it sound policy to pursue a goal of zero pollution? Why or why not?
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Chapter 12: Problem 35
From an economic perspective, is it sound policy to pursue a goal of zero pollution? Why or why not?
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In the tradeoff between economic output and environmental protection, what do the combinations on the protection possibility curve represent?
Is zero pollution an optimal goal? Why or why not?
In the Land of Purity, there is only one form of pollution, called "gunk." Table 12.14 shows possible combinations of economic output and reduction of gunk, depending on what kinds of environmental regulations are chosen. $$ \begin{array}{l|l|l} \hline {\text { Combos }} & \text { Eco Output } & \text { Gunk Cleaned Up } \\\ \hline \mathrm{J} & 800 & 10 \% \\ \hline \mathrm{K} & 500 & 30 \% \\ \hline \mathrm{L} & 600 & 40 \% \\ \hline \mathrm{M} & 400 & 40 \% \\ \hline \mathrm{N} & 100 & 90 \% \\ \hline \end{array} $$ a. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the percentage reduction of gunk, and with the quantity of economic output on the vertical axis. b. Which choices display productive efficiency? How can you tell? c. Which choices show allocative efficiency? How can you tell? d. In the choice between \(\mathrm{K}\) and \(\mathrm{L}\), can you say which one is better and why? e. In the choice between \(\mathrm{K}\) and \(\mathrm{N}\), can you say which one is better, and why? f. If you had to guess, which choice would you think is more likely to represent a command-andcontrol environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice \(\mathrm{L}\) or \(\mathrm{M}\) ? Why?
Give an example of a positive externality and an example of a negative externality.
As the extent of environmental protection expands, would you expect the marginal benefits of environmental protection to rise or fall? Why or why not?
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