Reference no: EM131004884
For the purpose of these exercises, let the firm's profits be given by P(x) = 20x - x^2, and let damages be given by D(x) = 2x^2.
You are asked to describe equilibrium outcomes for this economy under several alternative regulatory and/or legal regimes. For each of the situations described below, compute the following quantities:
Level of output x
Producer surplus, which equals profits, plus the net effects of any taxes, subsidies, or side-payments agreed to under the terms of a contract with the consumers; and Net damages to the consumer, likewise net of any payments made to or received from the polluting firm or the government.
3. A regulator imposes a unit Pigovian tax on pollution at the level t=2 per unit.
4. Same as (3), but the government returns to tax revenues collected to the consumers.
Can someone explain this to me?
|
Government transfers reduce the size of the economic pie
: How might increasing the level of government transfers reduce the size of the economic pie? Check all that apply. Greater transfer activity diverts productive resources into rent-seeking activity. Higher taxes may be necessary to finance increased tr..
|
|
Marginal benefit equals the marginal cost for each good
: Suppose that an economy is producing on its production possibilities curve but is not producing quantities of each good where the marginal benefit equals the marginal cost for each good.
|
|
Biological evolutionary principles of variation-inheritance
: How did Veblen relate the biological evolutionary (Darwinian) principles of variation, inheritance and selection, and Instincts to the cultural and institutional development of different societies and the social evolution of institutions?
|
|
Organization of petroleum exporting countries produces
: The following graph represents the world market for oil. The Organization of Petroleum Exporting Countries (OPEC) produces a large portion of the world's oil. Suppose OPEC representatives get together and agree to limit the global production of oil. ..
|
|
Which equals profits-plus net effects of any taxes-subsidies
: For the purpose of these exercises, let the firm's profits be given by P(x) = 20x - x^2, and let damages be given by D(x) = 2x^2. Producer surplus, which equals profits, plus the net effects of any taxes, subsidies, or side-payments agreed to under t..
|
|
Cost to purchase a new piece of production equipment
: You have been asked by your boss to estimate the cost to purchase a new piece of production equipment. The company purchased this same type of equipment in the past for $15,000. The original equipment had a capacity of 2,000 units, while the new equi..
|
|
What uniform amount can you withdraw from the account
: You have opened a retirement account that will pay 4% interest per year. You plan to deposit 8% of your annual salary into the account for 40 years before you retire. Your first year's salary is $48,000, and you expect your salary to grow 3.5% each y..
|
|
Decided to purchase a home after graduation
: You have decided to purchase a home after graduation, and you are saving for the closing costs ($3500) and down payment. To avoid paying mortgage insurance and to get a better interest rate, you need a down payment of 20%. You can afford a monthly pa..
|
|
The surplus created by a price floor
: The surplus created by a price floor will likely be? smaller if the good is a necessity. larger if the good is addictive. smaller if the good is a luxury. unaffected by the time that has elapsed since the price ceiling is implemented. None of these a..
|