Question

In: Economics

8.Now suppose country A imposes a tax T on A's production of qA to curb emissions....

8.Now suppose country A imposes a tax T on A's production of qA to curb emissions. Country B, however, is not taxed. A's cost function is now CA (qA)=46qA, while B's cost function is CB(qB)= 4qB . World demand is p=99-Q. The amount of greenhouse gas emissions per unit is still 0.5, such that total world emissions are given by 0.5Q. What are total world emissions after country A enacts a carbon tax?

This question will show how incomplete regulation can lead to "carbon leakage". Despite A reducing output (and thus emissions), total world emissions are only partially reduced, since B responds by increasing its output (and thus emissions). Estimation of carbon leakage is an active area of research in environmental economics.\

9. Consider the oil-producing countries of A, B, and C. Each has a marginal cost of zero. World demand is given by Q=674-P. Suppose the three countries form a cartel, and that none of them has an incentive to deviate from the cartel. By how many units lower is the total output of oil under the cartel relative to the Cournot solution?

Solutions

Expert Solution


Related Solutions

QD =8−P4 andQS =−1+P2 a) Suppose the government imposes a $4 tax on consumers, what will...
QD =8−P4 andQS =−1+P2 a) Suppose the government imposes a $4 tax on consumers, what will be the price of consumers, price of producers, quantity bought/sold, CS, PS, TS, GR, and DWL? b) Suppose the government imposes a $4 tax on producers, what will be the price of consumers, price of producers, quantity bought/sold, CS, PS, TS, GR, and DWL? c) Suppose the government imposes a $4 subsidy, what will be the price of consumers, price of producers, quantity bought/sold,...
A tax on hamburgers Suppose a state government imposes a tax on sales of hamburgers. Before...
A tax on hamburgers Suppose a state government imposes a tax on sales of hamburgers. Before the tax, 16 million hamburgers were sold at $3.25 per hamburger. With the tax in effect, 14 million hamburgers are sold, buyers pay $3.75 per hamburger, and sellers receive $3.00 per hamburger. In the scenario above, what is the tax ($ per hamburger)? In the scenario above, what is the tax incidence that falls on the sellers of hamburgers? ($ per six pack)?
The government of Country B imposes an income tax of 30% on the net income realized...
The government of Country B imposes an income tax of 30% on the net income realized from sources within Country B by foreign persons engaged in business there. Domestic persons (including Country B corporations) are not subject to the income tax. Cosmos Corporation, a U.S. corporation, is engaged in Country B in the business of mining and exporting copper ore through a wholly owned subsidiary organized under the laws of Country B. As a Country B corporation, the subsidiary is...
Suppose that the government imposes a $1 tax on a good that currently sells for a...
Suppose that the government imposes a $1 tax on a good that currently sells for a price of $5. Also, assume that after the tax is imposed, the good sells for $5.60. Which statement best explains the effect this has on the tax burden? a. The tax burden is being passed on to buyers. b. The tax burden is being carried by sellers. c. The tax burden is being shared between buyers and sellers. d. The tax burden is precisely...
Suppose that Country X subsidizes its exports and Country Y imposes a “countervailing” tariff that offsets...
Suppose that Country X subsidizes its exports and Country Y imposes a “countervailing” tariff that offsets the subsidy’s effect, so that in the end, relative prices in Country Y are unchanged. What happens to the terms of trade? What about welfare in the two countries? Suppose, on the other hand, that Country Y retaliates with an export subsidy of its own. Contrast the result.
Suppose the government imposes a tax on gasoline. Would the revenue collected from this tax likely...
Suppose the government imposes a tax on gasoline. Would the revenue collected from this tax likely be greater in the first year after it is imposed or in the fifth year? Explain using a graph. Would the deadweight loss from this tax be greater in the first year after it is imposed or in the fifth year? Explain using a graph.
Suppose a state government imposes a tax on sales of hamburgers. Before the tax, 16 million...
Suppose a state government imposes a tax on sales of hamburgers. Before the tax, 16 million hamburgers were sold at $3.25 per hamburger. With the tax in effect, 14 million hamburgers are sold, buyers pay $3.75 per hamburger, and sellers receive $3.00 per hamburger a) In the scenario above, what is the tax ($ per hamburger)? b) In the scenario above, what is the tax incidence that falls on the sellers of hamburgers? ($ per six pack)?
Suppose a state government imposes a tax on sales of hamburgers. Before the tax, 16 million...
Suppose a state government imposes a tax on sales of hamburgers. Before the tax, 16 million hamburgers were sold at $3.25 per hamburger. With the tax in effect, 14 million hamburgers are sold, buyers pay $3.75 per hamburger, and sellers receive $3.00 per hamburger. In the scenario above, what is the tax ($ per hamburger)?
If government imposes a tax of 8% on luxury cars that the consumer must pay, why...
If government imposes a tax of 8% on luxury cars that the consumer must pay, why does the consumer not actually pay the full 8%? How is it determined how much the consumer will pay and how much the producer will pay? Is it possible for an 8% tax the government imposes on the consumer to actually have 1% paid by the consumer and 7% by the producer? Why or why not?
Suppose the government imposes a tax of $10 on every pair of shoes sold be every...
Suppose the government imposes a tax of $10 on every pair of shoes sold be every seller in Canada. Will the $10 be paid by the seller, the buyer or both? How does the price elasticity of demand affects the incidence of this tax on buyers and sellers?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT