Answers to chapter 16

Answers to chapter 16 - Solutions to End-of-Chapter...

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Solutions to End-of-Chapter Exercises Chapter 16 [31] Section 16.1 [31.1]: The Optimal Level of Pollution 1.1 marginal cost, marginal benefit 1.2 increases 1.3 horizontal 1.4 1 1.5 a. 6 units abated; b. $12 per unit 1.6 a. 9 hours, where marginal benefit = 0; b. 5 hours, where marginal benefit = marginal external cost c. 'Internalize the externality', charging Vivian $4/hour for practice. Section 16.2 [31.2]: Taxing Pollution 2.1 private, external 2.2 pollution tax; marginal abatement cost 2.3 up arrow (the supply curve shifts upward by the amount of the tax), up arrow, down arrow 2.4 the quantity of the product demanded, the pollution per unit produced 2.5 up arrow, up arrow, down arrow 108
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109 Chapter 16 2.6 a. b. 220, 93 c. 0.20, 0.14 2.7 a. Producers will bear part of the tax. Specifically the decrease in the amount of heating oil demanded will decrease the demand for crude oil, decreasing its price. Part of the tax will be borne by the people and governments who own crude oil. b.
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This note was uploaded on 10/25/2009 for the course ECON 81509 taught by Professor X.song during the Spring '09 term at Mesa CC.

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Answers to chapter 16 - Solutions to End-of-Chapter...

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