Chapter 5, The Economics of Environmental Quality Video Solutions, Environmental economics : an introduction

Problem 1

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.)

Linh Vu

Numerade Educator

View

Problem 2

Suppose there is a river on which are located several micro breweries, each of which discharges pollutants into the water. Suppose somebody invents a new technology for treating this waste stream that, if adopted by the breweries, could substantially diminish emissions. What are the impacts of this invention on $(a)$ the actual level of emissions and $(b)$ the efficient level of emissions?

Yingjie Wang

Numerade Educator

04:14

Problem 3

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?

Qudsiya Anis

Numerade Educator

02:14

Problem 4

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 this: (a) with an equiproportionate decrease in emissions and (b) with a decrease that meets the equimarginal principle.
$$
\begin{array}{lrrrrrrrrrrr}
\hline \begin{array}{l}
\text { Emissions } \\
\text { (tons/week) }
\end{array} & \mathbf{1 0} & \mathbf{9} & \mathbf{8} & \mathbf{7} & \mathbf{6} & \mathbf{5} & \mathbf{4} & \mathbf{3} & \mathbf{2} & \mathbf{1} & \mathbf{0} \\
\hline \text { Marginal Abatement } & & & & & & & & & & & \\
\text { Costs: } & & & & & & & & & & & \\
\text { Firm 1 (\$/ton) } & 0 & 4 & 8 & 12 & 16 & 20 & 24 & 28 & 36 & 46 & 58 \\
\text { Firm 2 (\$/ton) } & 0 & 1 & 2 & 4 & 6 & 8 & 12 & 20 & 24 & 28 & 36 \\
\text { Firm 3 (\$/ton) } & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 \\
\hline
\end{array}
$$

Nick Johnson

Numerade Educator

02:34

Problem 5

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?

Kaylee Mcclellan

Numerade Educator