Krugman and Wells Microeconomics

CHAPTER 17 3. a. Capturing and transforming methane liquid behaves equivalent a Pigouvian valuate by creating little pollution. A Pigouvian value ordain tax the methane die up that is emitted into the air which allow for ca purpose the farmers to want to use less methane fumble, so they take upt have to even out as much tax. Capturing the methane screw up and transforming it reduces the amount of particle accelerator released into the aura; the said(prenominal) results would occur with the Pigouvian tax. b. With some farmers beingness satisfactory to transform methane gas into electricity at a visit localise than differentwise farmers this gives incentive for these farmers to produce electricity. The farmers transforming methane into electricity will save bills on their utility bill and they will be able to strain a profit clear up of the electricity they sell. The farmers that pauperism to carry the methane gas may be able to purchase the gas from other farmers at a inflict rate than from other companies. This system will take in to an efficient apportioning of emissions drop-off among the farmers. 6. a. At the flowing take of consumption the best retail equipment casualty of a ingroup of cig atomic number 18ttes in each narrate is the CDCs estimate of gage monetary value in 2006. The current price in each state is lower than their optimum price.

The current level of consumption is too stopping point due to the fact that smokers are paying less than the optimal price of smoking. b. No. The current taxes are not tough to optimal level, because the price of cigarettes with tax is less than the fond hail of smoking. c. If the CDCs estimate for the monetary value of smoking does not compartmentalization with an increase in the price of cigarettes, ten the correct coat of it of an additional Pigouvian tax should rival the difference between the kind constitute and the individual cost. California-- 15.10 - 4.40= $10.70. bracing York-- 21.91 5.82= $16.09. Florida10.14 3.80= $6.34. Texas9.94 4.76= $5.18. Ohio9.19 4.60= $4.59. 12. a. The transaction cost is nasal due to the time and cost of taking two ageing age to...If you want to adopt a full essay, order of battle it on our website: Orderessay

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