Suppose a chemical plant regularly dumps chemicals into a river that must be cleaned up before farmers located downstream can use the water on their crops
Dumping the chemicals into the river saves the chemical plant $750,000 in yearly disposal costs and cleaning the water costs farmers $825,000 each year. Explain what the benevolent social planner would like to see happen in this case.
Since the cost to clean the water is greater than the cost of disposing the chemicals in a way other than dumping them into the river, the benevolent social planner would like to see the chemical plant not dump the chemicals in the river.
You might also like to view...
When the economy is in the liquidity trap,
A) velocity is constant. B) monetary policy is impotent. C) fiscal policy is impotent. D) income is zero
Jill, a bookkeeper, just received an attractive offer from an outside firm and so she asks for a raise from her current employer. If the management of Jill's company is aware of the offer, she would
a. Have a weaker bargaining position b. Have a stronger bargaining position c. Be laughed at d. All of the above
The marginal utilities associated with the first 4 units of consumption of good Y are 10, 12, 9, and 7, respectively. What is the total utility associated with the third unit?
a. 3. b. 9. c. 25. d. 31. e. The amount cannot be determined from the marginal utilities.
The following accompanying table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for purchase. CPU GHzTotal BenefitMarginal BenefitTotal CostMarginal Costs2.0$1,000 $900 2.5$1,400 $1003.0 $300$1,200 3.5$1,900 $1,500 4.0$2,000 $400 The total benefit of a 3.0GHz computer is:
A. $900. B. $1,700. C. $1,650. D. $300.