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Environmental Economics Problem Set, Cheat Sheet of Economic law

Environmental Economics Problem Set

Typology: Cheat Sheet

2022/2023

Uploaded on 02/01/2023

Gowrik
Gowrik 🇺🇸

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bg1
problem
Seth
El
30
2.
Static
market
and
Equilibrium
D=
14
-
Plz
P=4t4Q
c.
a)
9=14
-
(
4tL¥
P=
4+40
Mcp
P=
4+414
)
%
Q
-
14=-4-41
P
=
20
2
-
CS
20
Pp
ZQ
-
28
=
-4-40
9=14
-
Plz
^
16
/
Ps
2
Qt
49=28-4
G-
14
=
-
Plz
69
=
24
20-28
=
-
p
4
MB
0=4
P=
-29+28
-
Qp
4
b)
CS
=
42×8×4
PS
=
42×16×4
total
social
welfare
CS
=
16
A-
32
161-32--48
-
&
d)
total
surplus
=
total
social
welfare
-
total
damage
e)
MCs
=
Mcp
+
Mcd
Mcd
=
6
MCs
=
(4+40)+6
total
damage
=
6×4=24
M=l0t4#
total
surplus
=
48-24=22
f)
MCs
g)
MCs
=P
=
10+40
Mcp
MB
=
Q
=
14
-
Plz
*
28
p=
-20+28
MB
=
MCs
t
(
0,221
ps
(
S
-
2k
-128=101-4
Q
20
Pp
28
-
to
=
40+20
16
[
,
,
PS
18--6
Q
Q=3
-
p=
101-4137
4
MB
P
=
22
-
13019
Qp
4
pf3
pf4

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problem

Seth

El

Static

market

and

Equilibrium

D=

14

Plz

P=4t4Q

c.

a) 9=

4tL¥

P= 4+

Mcp

P=

4+

%

Q

P

=

20

2

CS

20

Pp

ZQ

=

Plz

^

16

/

Ps

2

Qt 49=28-4 G-

14

=

  • Plz

=

=

p

4 MB

0=4 P=

Qp

4

b)

CS

=

42 × 8 × 4

PS =

42 × 16 × 4 total

social

welfare

CS

= 16 A-

&

d)

total

surplus

= total social

welfare

  • total

damage

e)

MCs

=

Mcp

Mcd

Mcd

=

MCs

=

(4+40)+

total

damage

=

6 ×4=

M =l0t4#

total

surplus

=

48-24=

f)

MCs

g)

MCs

=P = 10+

Mcp

MB

=

Q

=

14

  • Plz

28

p=

-20+

MB

=

MCs

t

ps

S

2k

-128=101-4 Q

20

Pp 28

to

= 40+

[

PS

Q

Q=

p=

MB

P = 22

Qp

h

CS =

0-5× 6 × 3 PS

=

0^5× 12 × 3

total social

welfare

=

CS + Ps

Cg

=

ps

=

18

=

MCs

Mcp

it

net

gain

= 6 × 3

28

=

Cs

  • 3,

0,20)

pg

  • 14,

)

( 0116

)

.

MB

) Qs

Qp

b)

tax

is set

at

MB

=

MCs

,

which is

here (22-16--6).

Pigouvian

tax

is

set

at

the

cost

of

the

negative

externality

.

,

Static Market Equilibrium

and

Externalities

p

30

=

za

D: D= 30

ZQ or 0=

  • PIE S

:

P

=

p

= 20

a)

30 -2A

= 2+

P =

2+5 Q

Q

=

30 ¥

30 -2=2 Qt 56 P

=

Q=

15

  • Plz

28=7 Q

p

=

22

0=

or

a s

b) (

5=0.5× 8 × 4

30

CS,

Cs

)Pp

PS

=

0-5× 20 × 4

Ps

PS =

2

D

total social welfare

=

cstps

=

Qp

( 4,

)

steel

plant

earns

pollutes

worth

a) the

socially

efficient

outcome is

if

the steel

company

paid $ 1200

to

clean the

lake.

total

profit

then

would

amount to : $

WOO

$ 1200

1200T$ 1500

=

b) if

pollution

is

unregulated

tire

canoe

company

's

profits

would

drop

to 800+

The shell corn

penny

would

continue to make

$ 2000 in

profit

.

c) the steel

plant

would

be

forced

to

pay

the $ 1200 to clean

their

pollution

d)

the

steel

company

has

little to

gain from

cleaning

the

pollution

themselves

,

putting

the

financial

burden of

cleaning

on

the canoe

company if

negotiations

are allowed .