Managing Municipal Solid Waste

Managing Municipal Solid Waste.

1. Suppose you are a public official responsible for setting a retail disposal charge on antifreeze. Estimated marginal benefit and cost functions for antifreeze are as follows:

MPB = 14 – 0.25Q MPC = MSC = 1 + 0.2Q

MSB = 8 – 1.2Q,

where MPB, MSB, and MPC are measured in dollars per gallon, and Q is in millions of gallons.

1. Identify the Marginal External Benefit (MEB) function, and briefly explain what this function is measuring.
2. In the absence of government intervention, find the equilibrium price (P_C) and Quantity (Q_C) being exchanged in the antifreeze market?
3. Determine the retail disposal charge that will produce an efficient allocation of antifreeze.

Sustainable Development: International Environmental Agreements and International Trade.

4. Assume that the following equation quantifies the relationship between a country’s level of air pollution emissions (E) and its per capita income (I):

E = 10(I) − 0.25 (I)²,

where E is measured in thousands of tons of sulfur dioxide (SO₂) emissions, and I is measured in thousands of dollars.

1. Graph the equation, and explain how it supports the theory of an environmental Kuznets curve (EKC).
2. If a country’s per capita income (I) increases from $2,000 to $2,750, what is the associated change in emissions (E)? What do these changes suggest about where the country is operating on its EKC?