Question E4/Stretch Problem If we apply the idea of nitrate contamination (the context of the Unit 3 model) to the negative externality context, describe and explain how the use of a tax to move the market to a social equilibrium compares to the idea of getting to the optimal level of abatement (or the optimal level of contamination) through a government's policy choice. That is, compare and contrast the objectives of the government as well as the mechanisms involved in the two different approaches of the two different models. NOTE: This problem is designed to see how you look at the problem and less focused on getting everything right. If you are short of time, you may want
Question E4/Stretch Problem If we apply the idea of nitrate contamination (the context of the Unit 3 model) to the negative externality context, describe and explain how the use of a tax to move the market to a social equilibrium compares to the idea of getting to the optimal level of abatement (or the optimal level of contamination) through a government's policy choice. That is, compare and contrast the objectives of the government as well as the mechanisms involved in the two different approaches of the two different models. NOTE: This problem is designed to see how you look at the problem and less focused on getting everything right. If you are short of time, you may want
Chapter8: Market Failure
Section: Chapter Questions
Problem 3P
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3E4: use the following to complete the question.
![Question E4/Stretch Problem
If we apply the idea of nitrate contamination (the context of the Unit 3 model) to the negative
externality context, describe and explain how the use of a tax to move the market to a social
equilibrium compares to the idea of getting to the optimal level of abatement (or the optimal
level of contamination) through a government's policy choice. That is, compare and contrast the
objectives of the government as well as the mechanisms involved in the two different
approaches of the two different models. NOTE: This problem is designed to see how you look at
the problem and less focused on getting everything right. If you are short of time, you may want
to focus on checking other problems in the assessment.
14/14](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2acca9a2-9eb2-4cbe-a7d0-940199f6056b%2F5903ab42-5164-43ef-8600-004815eab52f%2Fe4908dr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question E4/Stretch Problem
If we apply the idea of nitrate contamination (the context of the Unit 3 model) to the negative
externality context, describe and explain how the use of a tax to move the market to a social
equilibrium compares to the idea of getting to the optimal level of abatement (or the optimal
level of contamination) through a government's policy choice. That is, compare and contrast the
objectives of the government as well as the mechanisms involved in the two different
approaches of the two different models. NOTE: This problem is designed to see how you look at
the problem and less focused on getting everything right. If you are short of time, you may want
to focus on checking other problems in the assessment.
14/14
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