Most economists favor a tax on carbon because Group of answer choices -The costs of carbon emissions have been underestimated by the market system and the tax would help businesses and consumers make better choices -Economists are in favor of anything that helps the government -That is not true. Most economists question climate change. -Taxes help to increase corporate profits

Most economists favor a tax on carbon because Group of answer choices -The costs of carbon emissions have been underestimated by the market system and the tax would help businesses and consumers make better choices -Economists are in favor of anything that helps the government -That is not true. Most economists question climate change. -Taxes help to increase corporate profits

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

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

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

Chapter16: Externalities, The Environment, And Natural Resources

Section: Chapter Questions

Problem 2DQ

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General questions Howshould the optimal price of carbon be set? Which alternative approaches are available and which factors determine the price of carbon?”
What advantages and disadvantages do you see in using acap-and-trade system to reduce greenhouse gas emissions?What pros and cons do you see in using carbon taxes toachieve this goal? What do you think of the idea of a revenueneutralcarbon tax? If you were a U.S. senator, what type ofpolicy would you support in order to address emissions in theUnited States, and why?
6. Climate change and externalities. How is the issue of climate change related to the concept of externalities? What is the externality? What are the relevant markets? b. Provide an example of a market that features this externality. Assuming there is no intervention to correct for the externality, compare the market allocation to the efficient allocation. Does the market produce too much? Too little? Is the market outcome efficient? а. c. What is the relationship between the marginal private cost of production in this market and the marginal social cost? Explain. d. Suppose you wanted to come up with an estimate of the magnitude of the marginal external cost (in dollars). What would this number represent? What sort of information would you need to determine this number?
Name two public goods and explain why they are public goods.
Can extreme levels of pollution hurt the economic development of a high-income country? Why or why not?
. Both Wisconsin and Illinois border Lake Michigan. The lake is becoming polluted and both states are deciding whether or not to clean it. If Wisconsin decides to clean the lake it will cost 1200 and generate social benefits of 1500 – however, Wisconsin will receive only 1100 of those social benefits while neighbor Illinois will receive the other 400. If Illinois cleans the lake, it will cost them 700 and generate social benefits of 900 – however, Illinois will receive only 600 of those benefits, Wisconsin will receive the remaining 300. If a state does not clean the lake, it experiences a cost of $0. If both states clean the lake, the payoffs will be A. Wisconsin gains 100, Illinois gains 200B. Wisconsin gains 200, Illinois gains 300C. Wisconsin gains 200, Illinois loses 100D. Wisconsin gains 100, Illinois loses 100
1- Suppose, a polluting firm initially discharges 80tons of CO2 emissions into a fishery firm. Without liability law in place, it causes a total damage of say, $22,000 to the fishery. With liability law, it undertakes a scheme to reduce emissions from 80 tons to 50 tons where MAC=MD. But the scheme costs the polluting firm $ 4500. How much the polluting firm can save from the total damage now? Show with graph.
"Examine the economic impacts of implementing a carbon tax as a policy measure to combat climate change. Discuss how a carbon tax might influence consumer behavior, energy production, and technological innovation. Additionally, evaluate the potential effects on global trade patterns and the distribution of income. between different socioeconomic groups within a country."
ions 1. A single firm's innovations in production technology often benefit the production of other firms because these other firms learn about the new technology and can use some of the ideas in their own production. ems a. Is there an externality here? 0. How would an economist rank the following two policies in this situation? Why? 1.A tariff on imports, to make sure that domestic production using the new technology occurs. IL. A subsidy to domestic production, to make sure that domestic production using the new technology occurs. C. What third policy (a tax or a subsidy to something) would the economist recommend as even better than these two?
(Figure: The Socially Optimal Quantity of Emissions from Coal Production) Use Figure The Socialy Optimal Quarety of Emissions from Coal Production in the figure, firms are the only beneficiaries of polution, and costs are borne solely by others in the society. Without government intervention Marginal social cost, marginal social benefit MSC of pollution MSB of pollution Quantity of pollution emissions (tons) O The outcome cannot be determined without more information Orms will continue to polute until the marginal benefit to them is $200 O firms will continue to pollute until the marginal benate to them is zero. O the quantity of pollution will be optimal.
Conservation provisions in a Farm Bill are good for the environment and O all of these none of these limiting production often satisfy environmentalists O limiting crop support spending
(Figure: The Quantity of Pollution in Coal Production) Use Figure: The Quantity of Pollution in Coal Production. Whe this economy produces 50 tons of emissions: MSB, MSC 200 150 100 50 MSB 200 Quantity of pollution emisions (tons) it is producing below the socially optimal level of output. the marginal social cost equals the marginal social benefit. it is producing at its socially optimal level of output. the marginal social cost is greater than the marginal social benefit. 0 50 MSC 100 150