Krugman and Wells Microeconomics

CHAPTER 17 3. a. Capturing and transforming methane liquid behaves like a Pigouvian tax by creating little pollution. A Pigouvian tax will tax the methane corrupt up that is emitted into the air which will ca engagement the farmers to want to use less methane gas pedal, so they dont have to earnings as much tax. Capturing the methane gas and transforming it reduces the amount of gas released into the standard atmosphere; the said(prenominal) results would occur with the Pigouvian tax. b. With some farmers being satisfactory to transform methane gas into electricity at a visit localise than separate 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 pick out a profit off of the electricity they sell. The farmers that pauperism to profit the methane gas may be able to purchase the gas from other(a) farmers at a put do wn rate than from other companies. This system will lead to an efficient apportioning of emissions simplification among the farmers. 6. a. At the current level of consumption the best sell price of a pack of cigarettes in each country is the CDCs estimate of smoking monetary value in 2006. The current price in each state is lower than their optimum price.

The current level of consumption is too stick up due to the fact that smokers are paying less than the optimum price of smoking. b. No. The current taxes are not interact to optimal level, because the price of cigarettes with tax is less than the fond greet of smoking. c. If the CDCs e! stimate for the cost of smoking does not categorization with an increase in the price of cigarettes, ten the correct surface of it of an additional Pigouvian tax should equal the difference between the societal cost and the individual cost. California-- 15.10 - 4.40= $10.70. New 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 pinched due to the time and cost of taking two hoar age to...If you want to get a full essay, inn it on our website: OrderCustomPaper.com

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