22225q1q2q341 42 43producers of renewable energy don'tDemand (private value)91 92 93Supply (private cost)Social ValueSocial Cost13[Choose]enjoy the monetary benefit of notdamaging the environmentproducers of fossil fuels don't bear thecost of the damage their emissions ofgreenhouse gasses do to the climate[Choose ] Ross Gittins states thatWhen the producers of fossil fuels don't bear the cost of the damage their emissions ofgreenhouse gasses do to the climate, and the producers of renewable energy don't enjoy themonetary benefit of not damaging the environment, these two "externalities" - one bad, theother good constitute "market failure".Match the scenarios discussed in the statement to the plots to the different scenarios. Notethat the private and social values/costs overlap in the first plot. Some plot do not match anyscenario discussed in the statement.

Step 1:Step 2:Step 3: Step 4:Final Answer:

Answered: 22 225 q1q2q3 41 42 43 producers of…

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter17: Market Failure: Externalities, Public Goods, And Asymmetric Information

Section: Chapter Questions

Problem 12QP

See similar textbooks

Similar questions

A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals to clear some of Sherwoods forest and grow com, but obtaining this additional economic output will have an environmental cost from reducing the number of trees. Table 12.11 shows possible combinations of economic output and environmental protection. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the number of trees, and the quantity of economic output, measured in corn, on the vertical axis. Which choices display productive efficiency? How can you tell? Which choices show allocative efficiency? How can you tell? In the choice between T and R, decide which one is better. Why? In the choice between T and S, can you say which one is better, and why? If you had to guess, which choice would you think is more likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice Q or S? Why?
From an economic perspective, is it sound policy to pursue a goal of zero pollution? Why or why not?
Is zero pollution an optimal goal? Way or why not?
Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once we accounted for both the private and additional external costs, the market price increased by only 50. If the external costs were 100 why did the price only increase by 50 when we accounted for all costs?
Consider two approaches to reducing emissions of CO2 into the environment from manufacturing industries in the United States. In the first approach, the U.S. government makes it a policy to use only predetermined technologies. In the second approach, the U.S. government determines which technologies are cleaner and subsidizes their use. Of the two approaches, which is the command-and-control policy?
Would environmentalists favor command-and-control policies as a way to reduce pollution? Why or why not?
Suppose you want to put a dollar value on the external costs of carbon emissions from a power plant. What information or data would you obtain to measure the external [not social] cost?
Show the market for cigarettes in equilibrium, assuming that there are no laws banning smoking in public. Label the equilibrium private market price and quantity as Pm and Qm. Add whatever is needed to the model to show the impact of the negative externality from second-hand smoking. (Hint: In this case it is the consumers, not the sellers, who are creating the negative externality.) Label the social optimal output and price as Fe and Qe. On the graph, shade in the deadweight loss at the market output.
Suppose a city releases 16 million gallons of raw sewage into a nearby lake. Table 12.8 shows the total costs of cleaning up the sewage to different levels, together with the total benefits of doing so. (Benefits include environmental, recreational, health, and industrial benefits.) Using the information in Table 12.8, calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. See Production, Costs and Industry Structure if you need a refresher on how to calculate marginal costs. What is the optimal level of sewage for this city? Why not just pass a law that films can emit zero sewage? After all, the total benefits of zero emissions exceed the total costs.
In the tradeoff between economic output and environmental protection, what do the combinations on the protection possibility curve represent?
Give an example of a positive externality and an example of a negative externality.

Recommended textbooks for you

Microeconomics

Economics

ISBN:

9781337617406

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Principles of Economics 2e

Economics

ISBN:

9781947172364

Author:

Steven A. Greenlaw; David Shapiro

Publisher:

OpenStax

Microeconomics

Economics

ISBN:

9781337617406

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Principles of Economics 2e

Economics

ISBN:

9781947172364

Author:

Steven A. Greenlaw; David Shapiro

Publisher:

OpenStax

Microeconomics: Principles & Policy

Economics

ISBN:

9781337794992

Author:

William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:

Cengage Learning

Principles of Microeconomics

Economics

ISBN:

9781305156050

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Micro Economics For Today

Economics

ISBN:

9781337613064

Author:

Tucker, Irvin B.

Publisher:

Cengage,

SEE MORE TEXTBOOKS