3. The figure shows supply and demand for planting trees, based on private costs and private value. Trees sequester carbon, meaning that they help counteract pollutants that contribute to climate change. Supply is given by P=(1/5)Q+4. Price of trees (S) 16 goitacle on oxibiadura insumsvog od bluoria doumn woll (oval laraitqosions-lovalioillo aniH) fgnnaly set to level insioilto Quantity of trees 80 D=PV=SV a. Suppose that the carbon sequestration that results from planting a tree is worth $4. Graph the social cost curve for tree planting that accounts for the positive externality inide of trees. O mongouts sgalloo to lovel yus tot atitenad stoving oth besoxs noinoube exibizdus on fic 794420bo ogallos 10 insome insicifte vllesimonços sill noitenubo agallos to giv b. Ignoring the positive externality, how many trees will be planted?
3. The figure shows supply and demand for planting trees, based on private costs and private value. Trees sequester carbon, meaning that they help counteract pollutants that contribute to climate change. Supply is given by P=(1/5)Q+4. Price of trees (S) 16 goitacle on oxibiadura insumsvog od bluoria doumn woll (oval laraitqosions-lovalioillo aniH) fgnnaly set to level insioilto Quantity of trees 80 D=PV=SV a. Suppose that the carbon sequestration that results from planting a tree is worth $4. Graph the social cost curve for tree planting that accounts for the positive externality inide of trees. O mongouts sgalloo to lovel yus tot atitenad stoving oth besoxs noinoube exibizdus on fic 794420bo ogallos 10 insome insicifte vllesimonços sill noitenubo agallos to giv b. Ignoring the positive externality, how many trees will be planted?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter12: Environmental Protection And Negative Externalities
Section: Chapter Questions
Problem 43P: A city currently emits 15 million gallons (MG) of raw sewage into a lake that is beside the city....
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3) When a third party benefits from the production of a good, this is referred to as a positive externality in production. When it rains, for example, the construction of a railroad station could provide refuge for the homeless. If one company creates new technology, such as database software, that technology can be leveraged by other companies to achieve comparable productivity improvements. In a free market, a corporation will disregard third-party benefits and produce at the free market outcome, which is socially inefficient.
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