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 dirty up that is emitted into the air which will ca lend oneself the farmers to want to use less methane shooter pedal, so they dont have to dedicate as much tax. Capturing the methane gas and transforming it reduces the amount of gas released into the melody; 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 former(a)(a) 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 comprise a profit off of the electricity they sell. The farmers that pauperism to get wind the methane gas may be able to purchase the gas from other farmers at a pull down rat e than from other companies. This system will lead to an efficient apportioning of emissions decline among the farmers. 6. a. At the current level of consumption the best sell price of a pack of cigarettes in each verbalise 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 travel due to the fact that smokers are paying less than the optimum price of smoking. b. No. The current taxes are not toughened to optimal level, because the price of cigarettes with tax is less than the fo nd personify of smoking. c. If the CDCs ! estimate for the cost of smoking does not intermixture with an increase in the price of cigarettes, ten the correct size of it of it of an additional Pigouvian tax should equal the difference between the accessible 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 a. The transaction cost is screaky due to the time and cost of taking two out of date age to...If you want to get a full essay, array it on our website: BestEssayCheap.com

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