Reference no: EM131227534
Suppose there are three mutually exclusive groups in a particular state: timber company shareholders, environmentalists, and neutral parties. The numbers of each are as follows:
|
Shareholders
|
100
|
|
Environmentalists
|
500
|
|
Neutral parties
|
1,500
|
The total profit from logging is $8,000, which is evenly divided among shareholders. Environmentalists wish to stop all logging and are willing to pay $25 each to do so. Neutral parties are uninterested in this debate.
(a) Is a law banning logging Pareto optimal? Is it Kaldor-Hicks efficient?
(b) Suppose that loggers would be fully compensated if logging were prohibited, but this would require raising tax revenue of $8,000 and paying it to shareholders. For each of the following scenarios, state whether a law banning logging, coupled with compensation, is Pareto optimal, and whether it is Kaldor-Hicks efficient:
(i) The tax is assessed equally on both environmentalists and neutral parties;
(ii) The tax is assessed only on environmentalists.
|
Differences in the available products
: Compare a $100,000 median family income in 1980 to the same income in 1990, 2000, and 2010. What are the differences in the available products? What are the differences in the quality of those products? Considering this, in which of those years wo..
|
|
What is the meaning of an initial return for an ipo
: What is the meaning of an initial return for an IPO? Were initial returns of Internet IPOs in the late 1990s higher or lower than normal? Why?
|
|
How does an organization message get through all the clutter
: Select three advertisements from three different countries using traditional advertising venues and Internet advertising venues. Assess how culture and ethics influence understanding the ad from each country.Incorporate concepts and examples from ..
|
|
Is the law efficient according to the pareto criterion
: Now suppose the government taxes water users and uses the revenue to fully compensate farmers for their losses. Is the law now efficient according to Pareto? Is it Kaldor-Hicks efficient? Explain.
|
|
Is a law banning logging pareto optimal
: Suppose that loggers would be fully compensated if logging were prohibited, but this would require raising tax revenue of $8,000 and paying it to shareholders. For each of the following scenarios, state whether a law banning logging, coupled with ..
|
|
Government prefer one of these policies over the other
: A government is considering a quota and a tariff, both of which will reduce imports by the same amount. Why might the government prefer one of these policies over the other?
|
|
How is the mps related to the saving function
: What is the relationship between the MPC and the MPS? If the MPC increases, what must happen to the MPS? How is the MPC related to the consumption function? How is the MPS related to the saving function?
|
|
Flow of money and goods in an economy
: In economics, using the circular flow model, explain the flow of money and goods in an economy.
|
|
Tax on sugary drinks imposed in berkeley california
: We'll apply demand and supply analysis to a real issue in the news: a tax on sugary drinks imposed in Berkeley California. Here's a recent article (August 25) from the New York Times, titled "More evidence that soda taxes cut soda drinking."
|