Chapter 4,5,6,9,10,12-1

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Suppose that the following discrete numbers show the integer values of MWTP and MC as
depicted in Figure 4.1 . Determine the socially efficient rate of output. Show that at any other
output level, the net benefits to society will be lower than they are at the efficient level. (The Continue to post
MWTP and MC numbers have to be interpreted with care. Thus, e.g., the marginal cost of 20 questions remaining
increasing output from 4 to 5 units is $9, which is also the amount by which cost decreases in
going from 5 to 4.)
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Step 1 of 3
Given information:
Table-1 shows the marginal willingness to pay and marginal cost associated with each level of
market output.
Table-1
Output MWTP MC
1 20 5
2 18 6
3 16 7
4 14 8
5 12 9
6 10 11
7 8 15
8 6 21
9 4 30
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Socially efficient rate of output:
Use Excel to plot the marginal willingness to pay (MWTP) and marginal cost (MC) against output
level and their intersection point would give the socially efficient rate of output, which is shown in
the Figure-1.
Figure-1
Comment
Step 3 of 3
From Figure-1, horizontal axis measures output and vertical axis measures cost. The equilibrium
occurs at the point where the MWTP curve intersects with the MC curve. It can be concluded that
the socially efficient rate of output is achieved in between market output 5 and 6 (nearly 5.8).
Since output can be produced in decimals, society has to locate either at market output level
5where the MWTP is just greater than the MC.
Below the output level 5 units the society has to incur the cost in order to main the equilibrium
quantity. This would reduce the net benefit of the society as a whole. If the society consumes
more quantity, then the cost is greater than the benefit.
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Chapter 4, Problem 4QFD Chapter 4, Problem 5QFD
Considering the definition of public goods Consider the example of the three homeowners
introduced in the chapter, is a bus a public good? Is around the lake (the ones depicted in Table 4.2 ).
a public telephone? Is a public park? Suppose the lake was cleaned up to the efficient
level and that the total costs of the cleanup were
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shared equally among the homeowners (stick to...
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Go back to question 2 in chapter 3. Suppose the marginal cost of producing this item is constant
at $5 per item. What is the socially efficient rate of output?
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Reference question 2 in chapter 3:
20 questions remaining
2. Below is the marginal willingness to pay of a consumer for organic apples.
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Table-1: Marginal and total willingness to pay for organic apples
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Consumption level
Marginal willingness to pay (in $) Marginal cost
(Apples per week)
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0 5 5
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1 4 5
2 3.2 5
3 2.6 5
4 2.2 5
5 1.8 5
6 1.5 5
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Socially efficient rate of output:
Socially efficient rate of output is achieved at the point where the marginal cost is intersects with
the willingness to pay.
Figure-1

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Figure- 1
From Figure-1, the marginal willingness to pay for is intersects with the willingness to pay at the
point of 0 output. Thus, there is no socially efficient rate of output since the marginal cost is
exceeds the marginal benefit at all the level of output.
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Following are portions of the demand curves of three individuals for the water quality in a small
pond. The water quality is expressed in terms of the parts per million (ppm) of dissolved oxygen
(DO). Water quality improves at higher DO levels. The demand curves show the desired water Continue to post
quality of each individual in relation to the marginal costs of water quality improvements (the 20 questions remaining
marginal cost of raising the DO level in the lake).
a. Find the aggregate marginal willingness-to-pay curve for these three people.
b. If the actual marginal cost of increasing DO is $12, what is the socially efficient level of DO in
the lake, assuming these three people are the only ones involved?
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The aggregate marginal willingness to pay curve for the 3 individual is as follows: Carlos
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The aggregate willingness to pay is the summation of individual willingness to pay curve.
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If the actual marginal cost increases to $12 then social optimal level is 12.
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Chapter 4, Problem 4QFD (1 Bookmark) Show all steps:
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Considering the definition of public goods introduced in the chapter, is a bus a public good? Is a
public telephone? Is a public park?
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Public goods:
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Goods and services which are non-excludable, non-rivalrous in nature defined as public goods.
In other words, goods and services associated with the free-rider problem are defined as public
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Non-excludable:
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Non-excludable property of public goods states that once a good or service is available for final University of S… 2429
consumption, then consumption by one person cannot exclude others from consuming it. In
simple words, a good or service once available to an individual cannot exclude others from
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consuming or making use of it.
For example, mosquito-abatement program, which once avail to a locality will provide open
access to all in that locality and no individual of that locality can exclude other person from the
same locality from taking benefit of this program.
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Non-rivalrous:
Non-rivalrous property of public goods states that, there is no opportunity cost associated with
the consumption of public goods by an individual. In simple words, consumption by individual
does not require more production of that good to avail for others consumption.
For example, the quality of air we breathe in a particular neighborhood is non-rivalrous in nature,
because every individual is a free rider in the case of access to clean air.
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A bus is a private good ; because once seat in bus is available to one person it cannot be
available to other person until person who is currently using it, stops using it. In case of a bus the
non-excludability property does not hold.
A public telephone is a potential public good , because public telephone satisfies the non-
rivalrous property but it does not satisfy the non-excludable property.
A public park is a public good , because both the non-excludability and non-rivalrity properties
hold in case of a public park.
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Consider the example of the three homeowners around the lake (the ones depicted in Table 4.2
). Suppose the lake was cleaned up to the efficient level and that the total costs of the cleanup
were shared equally among the homeowners (stick to integer values here). Will all three Continue to post
homeowners be better off? What problems does this bring up about sharing the costs of public 20 questions remaining
goods?
Reference Table 4.2:
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Marginal willingness to pay for and marginal cost of abatement of lake pollution:
Carlos
The individual and aggregate marginal willingness to pay for the abatement of water pollution Central Univer… 2506
and marginal cost of abatement of water pollution of the lake is shown in the Table-1.
Table-1 Reza
Level of
Marginal willingness to Aggregate Marginal cost of
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pay ($ per year) MWP clean up
(ppm)
Home
Home Owner A Home Owner C
Owner B
4 110 60 30 200 50
3 85 35 20 140 65
2 70 10 15 95 95
1 55 0 10 65 150
0 45 0 5 50 240
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Table-1 shows the individual and aggregate marginal willingness to pay for a cleaner lake and
marginal cost for a cleaner lake against the water quality (ppm). It can be suggested that the
socially efficient level of water quality in the lake is achieved at the water quality level of 2 ppm.
However, from the point of view of all three home owners together, the desired water quality is
better than 2 ppm; that is contamination level is less than the 2 ppm level.
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Assume Chapter
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lake 5QFD
is cleaned costs for Show
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up to the efficient level and the marginal all steps:
the cleaning of
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lake are equally distributed among all three home owners. Cleaning up of the lake to the efficient
level is associated with the socially efficient level of water quality. At socially efficient water
quality, the collective or aggregate marginal willingness to pay is equal to the marginal cost for a
cleaner lake. Thus, all home owners would be better off collectively.
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However, all individual may not better off at the water quality level of 2 ppm because free rider
problem may arise. This is because among these three home owners, the marginal willingness to
pay of B and C are very less in comparison to A and thereby, A may have incentive to under pay
than his willingness to pay as other two home owners are willing to pay less.
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Chapter 5, Problem 1QFD (1 Bookmark) Show all steps: Post a question
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Prove (graphically) that the point labeled e* in Figure 5.6 is indeed the point that minimizes total
social costs, the sum of abatement and damage costs. (Do this by showing that at any other
point, this total cost will be higher.)
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Reference Figure 5.6:
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Minimum social cost would be achieved at the point of intersection between the marginal
abatement costs (MAC) and the marginal damage costs (MD) as shown in Figure-1. At any point
other than the intersection point , the social cost would be higher than the social cost at point
.
Suppose the new point is to the left of the , then at this point the marginal abatement cost
will be greater than the marginal damage cost. At the social cost is higher than the social cost
at point . This is proved with the help of Figure-1.
Figure-1
In Figure-1, the social cost at point is the sum of damage costs (shown as triangular area a)
and abatement costs (area of b+c+d). Hence, the social cost at point is greater than the
social cost at point by the triangular area of c.
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Suppose a new law is put into effect requiring oil Following are the marginal abatement costs of
tankers to use certain types of navigation rules in three firms, related to the quantity of emissions.
coastal waters of the United States. Suppose that Each firm is now emitting 10 tons/week, so total
the very next year there is a large tanker accident emissions are 30 tons/week. Suppose we wish to
and oil spill in these waters. Does... reduce total emissions by 50 percent, to 15 tons...
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Suppose there is a river on which are located several paper mills, each of which discharges
pollutants into the water. Suppose somebody invents a new technology for treating this waste
stream that, if adopted by the pulp mills, could substantially diminish emissions. What are the Continue to post
impacts of this invention on ( a ) the actual level of emissions and ( b ) the efficient level of 20 questions remaining
emissions?
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wastes into the river. Assume that, new technology is introduced in the production process of
these paper mills, which will reduce the emission level of each mill substantially.
Due to use of this new technology in the production process the actual level of emission from
each mill would decrease. However, the ambient quality of water of this river might be the same Chegg tutors who can help
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Impact of adoption of new technology in production process of these mills, depends on the
ambient costs and damage costs associated with it. Introduction of new technology in the
operation of these mills will reduce the abatement cost of these mills. Reduction in the abatement
costs of each mill would shift the respective marginal abatement cost curve inwards or
downwards.
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Reduction in emission from each mill due to use of this new technology in the production process
would also reduce the respective damage costs. Reduction in damage costs of each mill would
shift the respective marginal damage cost curve inwards or downwards.
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However, efficient level of emissions of theses mills depends upon relative change in their
abatement costs and damage costs. If, the reductions in marginal abatement costs are same as
the reductions in marginal damage costs, then there would be no change in the efficient level of
emissions of these mills.
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Suppose there is a suburban community where domestic septic tanks are responsible for
contaminating a local lake. What is the effect on actual and efficient levels of water quality in the
lake of an increase in the number of homes in the community? Continue to post
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to the lake will increase in absolute terms. Increase in abatement cost would shift the marginal
abatement cost curve outwards.
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Factors affecting actual level of water quality:
Actual water quality would largely depend upon the action taken by the home owner to reduce
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emission from septic tank. If, the new home owners have opted for the appropriate methods to
reduce the septic tank emission to the lake, then the actual water quality might not deteriorate.
However, if the emissions from the septic tanks of the new homes are same as the old ones,
then the actual water quality would deteriorate.
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Factors affecting efficient level of water quality:
Efficient level of water quality depends upon the relative change in both the abatement costs and
damage costs of these newly settled homes. If increases in both the costs are same, then the
efficient water quality would be the same.
Comment

Suppose a new law is put into effect requiring oil Following are the marginal abatement costs of
tankers to use certain types of navigation rules in three firms, related to the quantity of emissions.
coastal waters of the United States. Suppose that Each firm is now emitting 10 tons/week, so total
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Following are the marginal abatement costs of three firms, related to the quantity of emissions.
Each firm is now emitting 10 tons/week, so total emissions are 30 tons/week. Suppose we wish
to reduce total emissions by 50 percent, to 15 tons per week. Compare the total costs of doing Continue to post
this: ( a ) with an equiproportionate decrease in emissions and ( b ) with a decrease that meets 20 questions remaining
the equimarginal principle.
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Given information:
Table-1 shows the marginal abatement cost of three firms, related to the quantity of emission.
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• Emission per firm is 10 tons per week.
• Total emission by all three firms is 30 tons per week.
• Total emission is planned to reduce by 50 percent to 15 tons per week.
Comment
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a.
Total abatement cost of equi-proportionate decrease in emissions:
Calculate the abatement cost of each firm to reduce emission up to the level of 5 tons per week
and add the abatement cost of each firm, in order to obtain the total abatement cost of equi-
proportionate decrease in emissions.
Comment
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Abatement cost of firm A:

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Thus, the abatement cost of firm A to reduce emission up to the level of 5 tons per week is $60.
Comment
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Abatement cost of firm B:
Thus, the abatement cost of firm B to reduce emission up to the level of 5 tons per week is $21.
Comment
Step 5 of 12
Abatement cost of firm C:
Thus, the abatement cost of firm C to reduce emission up to the level of 5 tons per week is $15.
Comment
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Total abatement cost:
Total abatement cost of equi-proportionate decrease in emissions can be calculated by adding up

the individual abatement cost of each firm.
Hence, the aggregate abatement costs for an equi-proportionate reduction in emission would be
.
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b.
Reduction in the emission according to equi-marginal principle:
Calculate the abatement cost of reduction in emission of each firm on the basis of equi-marginal
principle, and add the abatement cost of each firm, in order to obtain the total abatement cost.
According to the equi-marginal principle Firm has to reduce the quantity at the point where all the
firms marginal cost is equal. Thus, firm A should reduce its emission to 2 tons per week, Firm B
to 5 tons per week, and Firm C to 8 tons per week, to meet the planned reduction in emission of
15 tons per week. This is because at these emission levels of each firm, marginal abatement
costs would be $8.
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Abatement cost of firm A:
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Thus, the 5, Problem
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cost of firm level of 8 tons perShow
A to reduce emission up to the Bookmark week isall steps:
$12.
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Comment
Step 9 of 12
Abatement cost of firm B:
Thus, the abatement cost of firm B to reduce emission up to the level of 5 tons per week is $21.
Comment
Step 10 of 12
Abatement cost of firm C:
Thus, the abatement cost of firm C to reduce emission up to the level of 2 tons per week is $15.
Comment
Step 11 of 12
Total abatement cost:
Total abatement cost of equi-proportionate decrease in emissions can be calculated by adding up

the individual abatement cost of each firm.
Hence, aggregate abatement costs of reduction in emission on the basis of equi-marginal

principle would be .
Comment
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Comparing equi-proportionate decrease in emissions and reduction on the basis of equi-

marginal principle:
Aggregate abatement costs of reduction in emission on the basis of equi-marginal principle are
lower than the aggregate abatement costs for an equi-proportionate reduction in emission, and
thereby there will be saving in abatement cost of reduction in emission. Savings in abatement
cost is calculated as follows:
Hence, the savings in abatement cost is .
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Suppose a new law is put into effect requiring oil tankers to use certain types of navigation rules
in coastal waters of the United States. Suppose that the very next year there is a large tanker
accident and oil spill in these waters. Does this mean that the law has had no effect?
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In country A, a new law is passed that the oil tankers need to use certain navigational rules in
coastal waters to improve the ambient quality of water. However, in the very next year there is
large oil tanker accident and oil get spill in the water deteriorating the ambient quality of water. right now
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The oil tanker accident caused an unanticipated deterioration of the ambient quality of water.
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Comment
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Oil tanker accidents in the coastal areas are probabilistic and these accidents may happen any
time. This does not mean that the law passed by the government to improve the ambient quality
of water has no effect on the water quality.
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The law passed by the government to improve the water quality has significant impact in the
water quality, in short-run. But, in long-run the impact of the law passed by the country A on the
ambient quality of the water depends upon the probabilistic value of the unanticipated
deterioration in the water quality due to these types of accidents.
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Suppose air-pollution-control authorities in southern California propose to control mobile-source

emissions by requiring that 10 percent of all new cars sold in the region be electric. Contrast the
different perspectives that would be involved in analyzing this proposal with ( a ) economic Continue to post
impact analysis, ( b ) cost-effectiveness analysis, and ( c ) benefit–cost analysis. 20 questions remaining
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Air-pollution-control program:
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increasing the electric car sold in that country by 10 percent. Air-pollution-authority has Economics
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accounted for the economic impact, cost-effectiveness, and cost-benefit analysis of the pollution-
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control program.
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Economic impact analysis of air-pollution-control program:
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Economic impact analysis takes into account the impact of this pollution-control program on
various economic variables, such as, response of car producing industries to produce electric
cars, sales of these industries, growth of these industries, impact of the pollution-control program
on employment of these industries, etc.
Comment
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Application of this air-pollution-control program in the production process might alter the sales of
car producing industries and thereby would alter revenue, profit, and growth aspects of these
industries.
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b.
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Cost-effectiveness analysis includes alternatives other than introduction of electric cars to reduce
the mobile-source emissions. Under cost-effectiveness, cost of each alternative is accounted for
to reduce mobile-source emissions and these alternatives are compared against each other on
the basis of abatement cost of reduction of mobile-source emissions.
Comment
Step 9 of 13
In this case, if the abatement costs of reduction of mobile-source emissions are low due to use of
electric cars than the abatement costs associated with other alternatives, then the
implementation of electric cars to reduce mobile-source emission is cost-effective.
Comment
Step 10 of 13
c.
Comment
Step 11 of 13
Benefit-cost analysis of air-pollution-control program:
Comment
Step 12 of 13
Under benefit-cost analysis, the expected benefits of the car producing industries are compared
with their anticipated costs after implantation of air-pollution-control program or after the
implementation of electric cars in the production process. However, under benefit-cost analysis,
pollution-control authority does not only account for benefits and costs of car producing
industries, but also takes into account the ambient quality of air.
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By taking into account the benefit-cost ratio and ambient quality of air, an air-pollution-control
authority can attain the socially desirable level of air quality.
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Suppose we are comparing two ways of protecting ourselves against mobile source air pollution:
putting additional controls on the internal combustion engine or developing an entirely different
type of engine that is cleaner. How would changes in the discount rate be likely to affect the Continue to post
comparison among these two options? 20 questions remaining
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Discount rate is defined as the rate at which today’s costs would be offset by future benefits. In
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Step 4 of 5
Step 5 of 5
Air-pollution-authority has accounted for the benefit-cost analysis of two pollution-control

programs and its impact of change in discount rate while comparing these two pollution-control
alternatives.
Ambient quality of air is a qualitative aspect. Programs for improvement of ambient quality of air
require huge ambient costs, while the benefits associated with the improved air quality may occur
only after a decade or two, from the time of implementation of the pollution-control program.
Thus, it is difficult to find out the time period at which pollution-control programs would generate
benefits.
Hence, discount rate plays a vital role in determining the costs and benefits associated with
pollution-control programs and thereby it helps in better public policy decisions.
Since time period is difficult to know, pollution-control authority would anticipate the time period at
which future benefits would at least offset the present costs of pollution-control program.
Discount rate may vary over time horizon, because of the presence of the inflation factor. Thus,
discount rate can be distinguished as nominal discount rate and real discount rate. Nominal
discount rate is the market rate, while real discount rate is the inflation adjusted discount rate.
This states that nominal discount rate or market rate may remain same over the years, but real
discount rate would change over time.
Increase in real discount rate would diminish the present value of the benefit and costs
associated with the pollution-control program. In other words, present value of the benefits and
costs associated with the pollution-control program would diminish when discount rate increases
and vice-versa.
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Following are some illustrative numbers for benefits and costs arising from a program to restrict
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gives the highest benefit–cost ratio. Explain the discrepancy. 20 questions remaining
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the emission level. Costs and benefits from the pollution-control program are given in the Table-
1.
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Emissions (tons/month)
(Million Dollar) (Million Dollar)
10 0 0
9 4 2
8 8 4
7 18 6
6 32 9
5 44 14
4 54 21
3 62 36
2 68 48
1 72 64
0 to test PDF Combine

Sample output 74 only 86
Comment
Chapter 6, Problem 3QFD Step 3 of 5

(1 Bookmark) Show all steps:
ON
Maximum net benefit:
Net benefit from the pollution-control program can be calculated by subtracting costs required to
reduce emission at each level from benefits from reduction at each emission level. The estimated
net benefit from the pollution-control program is shown in Table-2.
Table-2
Benefits Costs Net benefits

Emissions (tons/month) B/C ratio
($ million) ($ million) ($ million)
10 0 0 0 0
9 4 2 2 2.00
8 8 4 4 2.00
7 18 6 12 3.00
6 32 9 23 3.56
5 44 14 3 3.14
4 54 21 33 2.57
3 62 36 26 1.72
2 68 48 20 1.42
1 72 64 8 1.13
0 74 86 -12 0.86
Comment
Step 4 of 5
From Table-2, it can be concluded that the net benefit from the pollution-control program is
maximum at the emission level of 4 tons per month; at emission level 4 tons per month, net
benefit is $33 million.
Comment
Step 5 of 5
Efficient emission level on the basis of Benefit-cost ratio:
Benefit cost ratio can be calculated by dividing costs associated with the reduction in emission at
each level with benefits associated with the reduction in each emission level. The estimated
benefit-cost ratio from the pollution-control program is shown in Table-2.
Hence, the benefit-cost ratio from the pollution-control program is maximum at the emission level
of 6 tons per month; benefit-cost ratio is 3.56.
Comment


Chapter 6, Problem 4QFD Bookmark Show all steps: Post a question
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Enter question
Suppose the costs of an environmental pollution-control program are expected to be equal to $80
per year, and that benefits will be $50 per year for 50 years, then $150 per year thereafter. At a
discount rate of 4 percent, what are the net benefits of this program? What would the net benefits
Continue to post
be at a discount rate of 2 percent? Comment on the difference.
Step 1 of 3
Environm
ental
Net benefits from the environment pollution-control program can be calculated as follows:

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Hence, the net benefit from the pollution-control at 4 percent discount rate would be $1,105.54
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The net benefits from the environment pollution-control program can be calculated as follows: University of S…
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Hence, the net benefit from the pollution-control at 2 percent discount rate would be $2556.785.
Comment
Step 3 of 3
When there is an increase in discount rates, the present worth of the future cash flow decreases
and vice versa. Hence, the net benefit of cash flow at 2% is greater than the cash flow at 4%.
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When setting public policy on environmental risks, should we base it on the levels of risk to which
people think they are exposed or on the risk levels as scientists have determined them to be in
fact? Continue to post
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Environm
Public policy on environmental risks: ental

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Public policy on environmental risks should be based on the two analyses: exposure analysis
and dose-response analysis. Exposure analysis takes into account the likelihood that the people Chegg tutors who can help
of a society will be exposed to environmental risks. However, dose-response analysis is more of right now
a laboratory analysis. In particular, dose-response analysis is done by scientists.
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Carlos 2506
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Assessment of both exposure analysis and dose-response analysis helps in estimating the
specific risks and also helps in characterizing the degree of risks faced by the people of that
society.
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Step 4 of 5
Exposure analysis is a kind of hypothesis formulation based on the expectation of people of a

society towards their exposure to environmental risks. However, dose-response analysis is
estimating the actual exposure of people of a society to the environmental risks, and thereby
testing the hypothesis of exposure formed on the basis of people’s expectations.
Comment
Step 5 of 5
Hence, implementation of public policy on environmental risks should be based on both exposure
analysis and dose-response analysis.
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“Efficiency implies cost-effectiveness, but cost-effectiveness does not imply efficiency.” Explain
this statement.
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Step 1 of 7 My Textbook Solutions
Cost-effectiveness:
In environmental economics, cost-effectiveness can be illustrated as the attaining maximum Environm

ental
improvement of environment quality or ambient quality level with least cost.

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Efficiency: Chegg tutors who can help

In general, efficiency is defined as the level of output that earns the society a maximum of net
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benefit. However, in environmental economics, efficiency is confined to balance between
abatement costs and damages of environmental pollution. In other words, it is the ambient quality Annie 966
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level where marginal abatement costs of pollution-control program are equal to the marginal
damages from pollution.
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Step 3 of 7
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Cost-effectiveness and Efficiency:
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Step 4 of 7
While efficiency deals with both benefit and cost side of a pollution-control policy, cost-
effectiveness deals with only the cost side of the pollution-control policy. Efficiency in
environmental economics is also known as the socially desirable level of environment quality.
Comment
Step 5 of 7
However, cost-effectiveness satisfies the minimum cost objective, which does not take into
account the socially desirable level of environment quality.
Comment
Step 6 of 7
In a pollution control model, all points on marginal abatement cost curve represent cost-
effectiveness
Sample output to testforPDF
that particular
Combine level only
of ambient quality level, but only the tangency point between
marginal abatement cost curve and marginal damage curve implies the efficient or socially
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Step 7 of 7
Hence, efficiency point on marginal abatement cost curve can imply cost-effectiveness, but all
cost-effectiveness cannot imply efficiency.
Comment
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What considerations come into play when When setting public policy on environmental risks,
considering whether the United States or any other should we base it on the levels of risk to which
political entity is spending the right amount for people think they are exposed or on the risk levels
environmental quality improvements? as scientists have determined them to be in fact?
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Environmental policy is sometimes criticized for being a white, middle-class preoccupation. How
might you interpret this position, using the concepts presented in this chapter?
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“Environmental policy is a white, middle-class preoccupation”:

Environm
ental
Comment
al al al
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Step 2 of 4
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Environmental policy is sometimes criticized as a white, middle-class preoccupation. This is due

to the fact that the environmental policies are regressive in nature.

Comment right now
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Step 3 of 4
Carlos 2506
For example, use of catalytic converters to reduce the tailpipe emission implies same cost to all Central Univer…
people of a region, if they are willing to pay to purchase the car. Each person who is buying the
car has to contribute the same amount to the reduction in emission from the tailpipe of cars.
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Comment
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Step 4 of 4
Another example is that improved public water supply system is more skewed towards the richer
section of the society as they accrue relatively more benefit, than the cost they are actually
incurring for the improved water quality.
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Do you think that the impacts of the program to control automobile pollution are progressively or
regressively distributed? How about the program to ensure the quality of public water supply
systems? Continue to post
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Distribution of costs of automobile pollution-control policies: ental

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Automobile pollution-control policies are regressively distributed because cost of using

technology for pollution reduction in automobiles is the same for all people of a region. Chegg tutors who can help
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Step 3 of 5 Carlos 2506

Central Univer…
For example, use of catalytic converters to reduce the tailpipe emission adds same cost to all
people of a region, if they are willing to pay to purchase a car. Each person who is buying a car Reza 2429
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has to contribute the same amount to the reduction in emission from the tailpipe of cars.
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Comment
Step 4 of 5
Distribution of benefits of improved quality of public water supply systems:
Comment
Step 5 of 5
Cost associated with the improved quality of public water supply systems are regressively
distributed because benefit from the improved water quality is more skewed towards higher-
income people than towards the lower-income people of a region, against the same cost to avail
the improved public water.
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Is there ever a justification for adopting an environmental regulation that cannot be, or will not be,
enforced?
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Justification of adopting an unenforceable environmental regulation:

Environm
ental
Comment
al al al
Economics
5th Edition
There is general tendency among people that once an environment-protection law is enacted, it
will automatically solve the associated problem. However, addressing the environmental problem
not only require enactment but also its enforcement. Chegg tutors who can help
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Enforcement of the environment-protection laws involves two main steps: monitoring and
sanctioning. However, sanctioning is most important from the viewpoint of enforcing the enacted Reza 2429
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law.
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Comment
Step 4 of 8
Monitoring process takes into account measurement of degree of pollution done by the polluters
in comparison to the requirement set out in the enacted environment-protection law.
Comment
Step 5 of 8
Sanctioning process takes into account the task of bringing polluters to justice, once they are
found violating the law in the monitoring process.
Comment
Step 6 of 8
Theoretically, sanction process is very simple; charging higher penalties or jail terms for more
intensive violators and low penalties for less intensive violators. But, practically it is not feasible
to charge high penalties against intense violators, if more people are involved in that process or
activity.

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An industry may 9, Problem
violate 4QFDenvironment-protection law very
a particular Bookmark Show
intensively, but it is all steps:
ON in that
practically not possible to charge penalties as allowed in the law, because people working
industry may go jobless. Thus, in reality many laws are difficult to enforce.
Comment
Step 8 of 8
However, enactment of such environment-protection law is necessary to keep in check the

intensive damage to the environment from a particular pollutant or activity. Hence, it is justified to
adopt an unenforceable environment-protection law, if the damage to the environment is serious.
Comment



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Suppose we adopt a regulation requiring that all new cars have catalytic converters installed to
reduce tailpipe emissions. Explain how this could have a beneficial impact in the short run but a
less beneficial impact in the long run.
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Step 1 of 4
Reduction in tailpipe emissions: short-run and long-run impact Environm

ental

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It is given that a region adopts a regulation which requires all new cars to install catalytic
converters to reduce the emissions from tailpipe of cars.
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Comment
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Carlos 2506
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Use of catalytic converters in cars will reduce the emissions from tailpipe of cars efficiently in
short run, but in the long run it may not be very effective. This is because in the long-run there is
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scope to opt for a new improved better technology than the existing technology (catalytic University of S…
converters).
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Comment
Step 4 of 4
Hence, concentrating on the existing technology might compromise the need for and
development of alternative technologies that would be more effective in reducing the emissions
from tailpipe of cars.
Comment

SampleSee solutionto test PDF Combine only

output See solution

ON
Enter question
It would seem that neighbors could easily negotiate among themselves to settle problems of local
externalities such as noise and unsightly land uses. Yet most communities control these
problems with local laws and regulations. Why?
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Step 1 of 6
Problems of local externality: local laws and regulations versus negotiation. Environm
ental

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Step 2 of 6
Neighbors of a community or locality can negotiate among themselves to solve problems of local
externality, but most communities prefer to solve these problems with the help of local laws and
regulations due to the involvement of property rights and bargaining. right now
Comment Annie 966

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For example, use of land for building of house by a land owner will have some kind of negative
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externality on the neighbors. Addressing this externality through negotiation may require huge University of S…
amount of money and sufficient time. This can be understood from two cases; first, large
externality, and second, small externalities. Find me a tutor
Comment
Step 4 of 6
In case use of land by a land owner results in large negative externality, then the neighbors have
to pay sufficient amount to the land owner to refrain from construction of buildings. Similarly, if
externality is small, then the construction of building will take place and in this case neighbors will
have better bargaining power than the landowner.
Comment
Step 5 of 6
But, negotiation to solve the local externality will require huge transactions on community-wide
basis. However, externality from land conversion can be effectively managed through collective
measures with less resources, time and energy.
Comment
Step 6 of 6
Hence, in case of local laws and regulations, the negotiation power will be more normally
Sample output to test
distributed andPDF Combine
would result onlyaddressing the issue of local externality.
in efficiently

ON
Enter question
Suppose courts changed rules regarding burden of proof, requiring polluters to show that their
emissions are harmless, rather than pollutees to show that they have been harmed. What impact
might this have?
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Step 1 of 5
Rules regarding proof of the impact of emissions: Environm

ental

al al al
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View all solutions

Step 2 of 5
Shifting the burden of proof from pollutees to the polluters has also shifted the costs associated
with the burden of proof towards polluters from pollutees.
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Comment
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Step 3 of 5
Carlos 2506
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This shift in burden of proof on polluters would increase the costs of polluters for not reducing
harmful emissions and thereby forcing the polluters to cut down the harmful emissions until that
Reza 2429
level is reached where these emissions cause no damage to the society or environment. University of S…
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Step 4 of 5
The change in rule of shifting the burden to the polluters would provide incentives to the polluters
to cut down harmful emissions either by adopting emission efficient technologies or by reducing
the volume of production.
Comment
Step 5 of 5
Hence, shift in the burden of proof on polluters might increase the production or private costs, but
it will reduce the social opportunity costs.
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Suppose a community weighed each resident’s solid-waste disposal when it was picked up and
published the individual totals each year in the local newspaper. Do you think this would lead to a
reduction in the total quantity of solid waste disposed of in the community? Continue to post
Step 1 of 5
Environm
Social status of households and reduction in total quantity of solid waste disposal: ental

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Social status of household in a community plays an important role in the reduction of solid waste
disposal in that community. Chegg tutors who can help
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For understanding the impact of social status of household in a community on the reduction in
total quantity of solid waste disposals, assume that the society is aware of the harmful impacts of Reza 2429
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the waste disposals and are particular about their stand to attain cleaner environment.
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Comment
Step 4 of 5
Now, if the society weight each household solid waste disposal and publish the data at the end of
each year in local newspaper, then this will lead to a reduction in the solid waste disposal by the
households even without any further inducement.
Comment
Step 5 of 5
Hence, People who are more concerned about their social stand will try to reduce the total
quantity of solid waste disposal to the environment.
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For what types of pollution problems is voluntary action likely to be the most effective policy
approach?
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Effectiveness of voluntary action on pollution problem:

Environm
ental
Comment
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5th Edition
Step 2 of 5
View all solutions
Voluntary action is likely to be the most effective approach in the case of some pollution
problems, such as noise pollution, solid waste disposals, junked automobiles, and unsightly
buildings etc.
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Step 3 of 5
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Noise pollution such as watching television or playing music in high volume can be effectively
addressed by voluntary actions.
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Step 4 of 5
Disposal of solid wastes in the locality can be effectively solved by voluntary actions, which
require proper disposal of solid wastes in appropriate place. Similarly, voluntary action can be the
best effective approach in saving the electricity, preserving wildlife and bio-diversity.
Comment
Step 5 of 5
However, it can be stated that only voluntary action cannot result in effective address to the
pollutions problems, thereby public policy is also necessary to address these pollution problems.
But, voluntary action which is backed by the moral suasion or public morality is a must for the
effectiveness of public policies to address pollution problems.
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Accidents with trucks carrying hazardous wastes are fairly common. Suppose regulators enact a
rule requiring that the perpetrators of such an accident be liable for a sum equal to the average
damages of all such accidents in the industry. Would this lead trucking companies to take the Continue to post
socially efficient amount of precaution against such accidents? 20 questions remaining
Step 1 of 2
Environm
ental
Impact of fines or penalties on trucking companies and for emissions or pollutions:
It is obvious that, charging fines or penalties will lead to the decrease in emissions or pollutions. Environment Environment Environment
al al al
However, in reality it is a difficult to charge fines of penalties for the pollution. If firms are charged Economics
5th Edition
more, then there is always the risk of cut in production level or unemployment.
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Since, it is difficult task to charge higher penalties for the emissions. Therefore, pollution control
authority in general charge penalties equal to the average damages from a particular source of
pollution. Even then, there is some chance of biasness in the policies while charging penalties
equal to the average damages from a particular kind of pollutions. Chegg tutors who can help
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Carlos 2506
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For example, accidents with trucks transporting harmful wastes are fairly common. Now,
regulators charge penalties for these accidents equal to the average damages of all these Reza 2429
accidents in the industry. As a consequence, some trucking companies will start to take socially University of S…
optimal level of precautions voluntarily and others will follow them because there is chance of
high penalties if numbers of polluters are less with higher level of emissions or pollutions. Thus, Find me a tutor
trucking companies would adopt socially optimal level of precaution to reduce the emissions, if
they are penalized by the amount equal to the average damage.
Hence, trucking companies would adopt socially efficient level of precaution, if they are penalized
by the amount equal to the average damages of all such accidents.
Comment

Accidents with trucks carrying hazardous wastes For what types of pollution problems is voluntary
are fairly common. Suppose regulators enact a rule action likely to be the most effective policy
requiring that the perpetrators of such an accident approach?
be liable for a sum equal to the average damages
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of all such accidents in the industry. Would...
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How might an emission charge program be designed to address the problem of automobile
emissions?
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Step 1 of 5
Emission charge program to control the emissions from automobiles:

Environm
ental
Comment
al al al
Economics
5th Edition
Emission charge is the charge or tax imposed on each unit of effluent discharged by the
polluters. Emission charge program can address the problem of emissions from each firm,
industry, etc. Chegg tutors who can help
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Emission charge on automobiles can reduce the automobile emissions and thereby help to
improve the ambient quality of air. Emission charge or tax on the automobile emissions would Reza 2429
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boost the moral suasion of the automobile firms to reduce emissions, because of the competitive
pressure.
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Comment
Step 4 of 5
Tax on emission would also provide strong incentives for innovation and technological
development to reduce automobile emission. This is because all firms aims to operate under the
cost-effective output level. Innovation may include use of catalytic inventors to reduce tailpipe
emissions, or use of CNG vehicles, etc.
Comment
Step 5 of 5
Hence, cost-effectiveness principle will induce automobile firms to reduce their emissions until
their marginal abatement costs are equal to the emission charge or emission tax.
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Explain how emission charges solve the equimarginal problem.
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Emission charges and equi-marginal principle:
Environm
ental
Comment

al al al
Economics
5th Edition
Step 2 of 7
View all solutions
Emission charge is the charge or tax imposed on each unit of effluent discharged by the
polluters. Emission charge allows the polluters to choose the pollution level in which they want to
operate, given that they have to pay a price for their emissions.
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Step 3 of 7
Carlos 2506
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Since, all firm wants to operate in the least-cost combinations, they would reduce their emission
level in order to minimize their cost of reducing emissions.
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Step 4 of 7
The reduction in emission level of each firm depends upon its marginal abatement cost function.
If the marginal abatement cost function is steeper, then there would be less reduction in the
emissions in response to the emission charge or tax and vice-versa.
Comment
Step 5 of 7
However, the least-cost level to reduce the emission is determined at the level, where the
polluters marginal abatement costs are equal to the emission tax imposed on the firm, and this
holds in case of all firms.
Comment
Step 6 of 7
Since, all firm aims at achieving the least-cost level to reduce the emission, then a tax on the
emissions by each firm would result to attainment of the level where equi-marginal principle could
hold.
Comment
Step 7 of 7
Hence, emission charges or taxes elucidate the equi-marginal problem.

ON
Comment

Emission charges are sometimes seen as creating When emission charges are put into effect, who
a “double burden”: Firms must pay ultimately ends up paying for them? Is this fair?
the costs of reducing emissions and also pay the
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government for polluting discharges. How might a
charge system be designed to reduce this...
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Opponents of emission charge policies sometimes assert that they are simply a way of letting
firms buy the right to pollute. Is this a reasonable criticism?
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Emission charge policies and the right to pollute:

Environm
Emission charge policies often criticized as the way to let the polluters buy the right to pollute. ental
However, this criticism depends upon the factor of competitive pressures.
In order to put into effect the emission charges, the assumption of competitive pressures will lead al al al
firms to reduce emission at minimum cost must hold. Competitive pressures would force firms to Economics
5th Edition
operate under efficient level of emissions. Efficient level of emissions refers to the emission level, View all solutions
where each firm’s marginal abatement costs are equal to the emission charges imposed on their
emission level.
However, absence of competitiveness would make the abatement cost functions of firms steeper,
which states that less emissions will be reduced in response to the imposition of emission Chegg tutors who can help
charges or taxes. right now
For example, PSU’s firm’s producing electricity in general would have steeper marginal
abatement costs due to lack of competitiveness. Annie 966
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Degree of competitiveness also plays a vital role in the enforcement of emission charges to
reduce emissions. Perfect competitive firms will have tendency to cut down emission level to a
Carlos 2506
greater extent in response to the imposition of emission taxes than monopolistic, duopoly, cartel, Central Univer…
or monopoly firms. In case of monopoly the impact of emission tax on reduction of emission
would be less or marginal.
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Thus, in case of monopoly firms, imposition of emission tax would let the way to buy the right to University of S…
pollute. However, in reality firms operate either in monopolistic market, or cartel market.
Hence, emission charge policies would let the polluters to buy the right to pollute if the degree of
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competitive pressures is low.
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When emission charges are put into effect, who ultimately ends up paying for them? Is this fair?
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Step-by-step solution 20 questions remaining
Step 1 of 4
Incidence of emission tax:
Environm
Comment ental

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The incidence of tax refers to the tax burden that a household, a society, a firm, or an industry
ultimately bears or ultimately has to pay the tax.
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right now

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When an emission tax put into effect on a firm, its incidence falls upon the people who ultimately
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buy the final output of that firm. Central Univer…
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Step 4 of 4
The incidence of emission tax on the buyers of firm’s final output is fair enough, because if the
incidence falls upon the firm owners or polluters, then there would be double burden on the
polluters. This double burden will arise because polluters have to invest on the innovation of
technologies to reduce emissions to the cost-effective level and firms also have to pay the
emission tax for the remaining emissions.
Thus, the incidence of emission tax on the buyers is fair enough, because firms are producing
goods to meet the consumption purpose of consumers and the consumers are better-off from the
consumption of final output produced by several firms.
Comment

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Samplegovernment
output tofortest
polluting
PDF discharges.
Combine How might
onlya

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Emission charges are sometimes seen as creating a “double burden”: Firms must pay the costs
of reducing emissions and also pay the government for polluting discharges. How might a charge
system be designed to reduce this double burden?
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Emission charge system to reduce double burden on firms: Environm

ental

al al al
Economics
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Step 2 of 5
Double burden refers to costs of reducing emission level as well as payment to the government
for the actual emission level. Double burden can discourage firms to engage in the production
activity. right now
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However, proper emission charge system would be able to avoid the double burden situation on
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firms. Emission charge system to avoid double burden should include the two-part emission University of S…
charge or tax.
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Comment
Step 4 of 5
Two-part emission tax is a system where some initial quantity of emission to go untaxed, and tax
applies to only the emission levels in excess of the socially efficient emission level.
Comment
Step 5 of 5
Along with the two-part tax system, a phase-in-period can also reduce the double burden on
firms. A phase-in-period refers to a period in which emission charges are low and gradually
increase with strategic plan.
Comment

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Chapter 4, Problem 1QFD Bookmark Show all steps:

Socially efficient rate of output:

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Socially efficient rate of output:

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Chapter 4, Problem 2QFD Bookmark Show all steps:

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Reference Table 4.2:

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Step 1 of 4 Annie 966

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Minimization of social cost: Find me a tutor

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Impact of adoption of new technology on the efficient level of emission:

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Factors affecting efficient level of water quality:

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• Emission per firm is 10 tons per week.

• Total emission by all three firms is 30 tons per week.