Textbook Notes (368,125)
Canada (161,663)
Economics (326)
ECON 110 (199)
Chapter 17

Chapter 17.docx

2 Pages
124 Views
Unlock Document

Department
Economics
Course
ECON 110
Professor
Ian James Cromb
Semester
Winter

Description
Chapter 17 – The Economic of Environmental Protection  The socially optimal level of output is at the quantity for which all marginal costs, private plus external, equal the marginal benefit to society. o Figure 17-1 pg. 418 o Figure 17-2 pg. 419  Internalizing the externality: a process that results in a producer of consumer taking account of a previously external effect  Zero environmental damage is generally not allocatively efficient  Pollution is being abated efficiently when the marginal cost of pollution abatement is the same for all firms  Direct pollution controls are usually inefficient because they do not minimize the total cost of a given amount of pollution abatement.  Monitoring and enforcement of direct pollution controls are costly, and this costliness reduces the effectiveness of the controls.  Emissions taxes can internalize pollution externalities so that profit-maximizing firms will produce the allocatively efficient amount of pollution abatement.  A disadvantage with emission taxes is that information necessary to determine the optimal tax rate is often unavailable  Tradable pollution permits: rights to emit specific amounts of specified pollutants that private firms may buy and sell among themselves. The total quantity of permits is set by government policy.  With tradable pollution permits, profit-maximizing firms will reduce pollution until their marginal abatement costs equal the price of pollution permits. The costs of a g
More Less

Related notes for ECON 110

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit