3. Assume that a chemical plant in your area has been dumping its toxic waste free...

3. Assume that a chemical plant in your area has been dumping its toxic waste free of charge into a local stream.
A. What is the criterion that we use to define “static economic efficiency”? Why would the market allocation not meet this economic efficiency criterion? (4)
B. Use a supply and demand (i.e., marginal benefit-marginal cost) diagram to compare the market allocation (price and quantity) with the socially optimal (i.e., statically efficient) allocation. (4)
C. How could you use a marketable permit system to solve this problem? Explain. (6)
D. How could you use Pigovian taxes to solve this problem? Explain. (6)

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

3. Assume that a chemical plant in your area has been dumping its toxic waste free...

3. Assume that a chemical plant in your area has been dumping its toxic waste free of charge into a local stream. A. What is the criterion that we use to define “static economic efficiency”? Why would the market allocation not meet this economic efficiency criterion? B. Use a supply and demand (i.e., marginal benefit-marginal cost) diagram to compare the market allocation (price and quantity) with the socially optimal (i.e., statically efficient) allocation. C. How could you use a marketable...

3. Assume that a chemical plant in your area has been dumping its toxic waste free...

3. Assume that a chemical plant in your area has been dumping its toxic waste free of charge into a local stream. A. What is the criterion that we use to define “static economic efficiency”? Why would the market allocation not meet this economic efficiency criterion? B. Use a supply and demand (i.e., marginal benefit-marginal cost) diagram to compare the market allocation (price and quantity) with the socially optimal (i.e., statically efficient) allocation. C. How could you use a marketable...

Many typical household cleaners contain a toxic chemical. Assume the percent of this toxic chemical in...

Many typical household cleaners contain a toxic chemical. Assume the percent of this toxic chemical in one glass cleaner is approximately normal. The mean percent is 3, the standard deviation of the percent is 1. 1 Randomly select one bottle of the glass cleaner, find the probability that the percentage of the toxic chemical is more than 3.255. 2.Randomly select 15 bottles of this glass cleaner, find the probability exactly 5 bottles which contain the toxic chemical more than 3.255....

Many typical household cleaners contain a toxic chemical. Assume the percent of this toxic chemical in...

Many typical household cleaners contain a toxic chemical. Assume the percent of this toxic chemical in one glass cleaner is approximately normal. The mean percent is 3, the standard deviation of the percent is 1. 1.(4 points) Randomly select one bottle of the glass cleaner, find the probability that the percentage of the toxic chemical is more than 3.255. 2.(4 points) Randomly select 10 bottles of this glass cleaner, find the probability exactly 3 bottles which contain the toxic chemical...

17.20. A chemical producer dumps toxic waste into a river.The waste reduces the population of fish,reducing...

17.20. A chemical producer dumps toxic waste into a river.The waste reduces the population of fish,reducing profits for the local fishing industry by $100,000 per year. The firm could eliminate the waste at a cost of $60,000 per year. The local fishing industry consists of many small firms. a) Using the Coase Theorem, explain how costless bargaining will lead to a socially efficient outcome, regardless of whether the property rights are owned by the chemical firm or the fishing industry....

Two chemical factories are discharging toxic waste into a large lake, and the pollution level at...

Two chemical factories are discharging toxic waste into a large lake, and the pollution level at a point ? miles from factory A toward factory B is ?(?) = 3?2 − 72? + 576 parts per million for 0 ≤ ? ≤ 50. Find where the pollution is the least

A new waste treatment plant has been planned to replace an existing small aging plant for...

A new waste treatment plant has been planned to replace an existing small aging plant for your home town. Discuss the MOEs for (i)the overall system, (ii)each phase of the overall system development,and (iii)the operations phase of any of the plant’s processes.

The maximum acceptable level of a certain toxic chemical in vegetables has been set at 0.4...

The maximum acceptable level of a certain toxic chemical in vegetables has been set at 0.4 parts per million (ppm). A consumer health group measured the level of the chemical in a random sample of tomatoes obtained from one producer. The levels, in ppm, are shown below. 0.31 0.47 0.19 0.72 0.56 0.91 0.29 0.83 0.49 0.28 0.31 0.46 0.25 0.34 0.17 0.58 0.19 0.26 0.47 0.81 Do the data provide sufficient evidence to support the claim that the mean...

1. The maximum acceptable level of a certain toxic chemical in vegetables has been set at...

1. The maximum acceptable level of a certain toxic chemical in vegetables has been set at 0.4 parts per million (ppm). A consumer health group measured the level of the chemical in a random sample of tomatoes obtained from one producer. The levels, in ppm, are shown below. 0.31 0.47 0.19 0.72 0.56 0.91 0.29 0.83 0.49 0.28 0.31 0.46 0.25 0.34 0.17 0.58 0.19 0.26 0.47 0.81 Do the data provide sufficient evidence to support the claim that the...

A chemical plant produces an ammonia-rich waste gas that cannot be released as-is into the environment....

A chemical plant produces an ammonia-rich waste gas that cannot be released as-is into the environment. One method to reduce the ammonia concentration in the waste gas is to bubble the waste gas through a liquid solvent. Components of the gas that are highly soluble, like ammonia, will dissolve into the liquid phase. Water is an appropriate liquid solvent for this process. The chemical plant produces 125.0 m3/hr of waste gas (ρ = 0.0407 mol/L) initially having a mole fraction...

Subjects