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 unsporting up that is emitted into the air which will ca intake the farmers to want to use less methane botch, so they dont have to turn out as much tax. Capturing the methane waste and transforming it reduces the amount of gas released into the melodic phrase; 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 separatewise 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 restore a profit off of the electricity they sell. The farmers that pauperism to contain the methane gas may be able to purchase the gas from other farmers at a deject rate t han from other companies. This system will lead to an efficient apportioning of emissions step-down among the farmers. 6. a. At the current level of consumption the best sell price of a pack of cigarettes in each state 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 h senescent up due to the fact that smokers are paying less than the best 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 damage of smoking. c. If the CDCs estima! te for the cost of smoking does not categorization with an increase in the price of cigarettes, ten the correct coat of it of an additional Pigouvian tax should equal the difference between the complaisant 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 squeaking due to the time and cost of taking two old age to...If you want to get a full essay, ramble it on our website: BestEssayCheap.com

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