16 May WHAT IS THE QUANTITY SUPPLIED AND THE QUANTITY DEMANDED IF THE GOVERNMENT RESTRICTS THE AMOUNT OF DISCHARGE TO “Q” BUT GIVES THE PERMITS AWAY?
Think of industry that pollutes the water and has access to variable technology that reducing that pollution. Graphically illustrate and explain the impact of each of the following, other things constant on the optimal level of water quality.
a. New evidence is discovered about a greater risk of cancer from water pollution.
b. A cost of pollution-control equipment increases
c. A technological improvement reduces the cost of pollution control
42. The following graph shows the market for pollution rights.
a. If there are no restrictions on pollutions, water amount is discharged?
b. What is the quantity supplied and the quantity demanded if the government restricts the amount of discharge to “Q” but gives the permits away?
c. Where is market equilibrium if the government sells the permits? Illustrate this graph.
d. What happen to market equilibrium if the government reduces the amount of discharge permitted to Q***? Illustrate this on the graph.
43. Four federal laws and subsequent amendments underpin U.S. environmental protection. Identify these laws.
44. The value of a home depends in part on how attractive other homes and yards in the neighborhood are. How do local zoning ordinances try to promote land uses that generate external benefits for neighbors?
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