Part I Indicate The Answer Choice That Best Completes The Statement Or Answers The Question 2 Points Each Figure 1 T 1 (56.18 KiB) Viewed 10 times
Part I Indicate The Answer Choice That Best Completes The Statement Or Answers The Question 2 Points Each Figure 1 T 2 (35.91 KiB) Viewed 10 times
Part I. Indicate the answer choice that best completes the statement or answers the question. (2 points each) Figure 1 The following graph shows the marginal cost curve for a pollution producing firm (MC) and the social marginal cost curve (MCS) for the same firm that includes the cost of the environmental damage the firm' st production does. The firm is a price-taker and sells its output at a price of P*. Price, costs of charcoal (a) distance BE. (b) distance AE (c) area ABEC. (d) area ABE. p MCS MC 1. Refer to Figure 1. In ark unregulated situation, this firm will produce q* and create total environmental damage given by (a) BE exceed additional firm profits of AC. (b) ABEC exceed additional firm profits of AEC. (c) AC exceed additional firm profits of BE. (d) ABE exceed additional firm profits of AEC. Charcoal per week 2. Refer to Figure 1. If bargaining costs in this situation are low, the firm and the injured party will choose an output level of q' rather than q' because, relative to output q*, at q' environmental costs of
3. Refer to Figure 1. If the government institutes an environmental tax of t per unit of output, this might have the following effects: I. A transfer from producer surplus to tax revenues II. A transfer from producer surplus to reduced environmental harm III. A transfer from consumer surplus to reduced environmental harm IV. A reduction in deadlight loss Which of these effects is illustrated in this graph? (a) I only (b) I and II only (c) I, III, and IV only (d) I, II, and IV only Laft to their un moive morkata tand to MacBook Pro
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