This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: A regional airport decides to extend a runway, increasing the amount of noise pollution on nearby ... (Read 63 times)

Brittanyd9008

  • Hero Member
  • *****
  • Posts: 500
on: Jul 1, 2018
A regional airport decides to extend a runway, increasing the amount of noise pollution on nearby homes. Assume that an optimal corrective tax can be applied.
 
  Should that tax be paid as compensation to the nearby homeowners? How might compensating the homeowners change their (and potentially others) incentives?

Question 2

Firm A is a monopoly. The demand for its output is p = 90 - Q. Production is such that Q = L. Firm A hires labor in a competitive market where the wage is 10. Firm A will hire
 
  A) 10 units of labor.
  B) 20 units of labor.
  C) 30 units of labor.
  D) 40 units of labor.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

l.stuut

  • Sr. Member
  • ****
  • Posts: 345
Reply #1 on: Jul 1, 2018
Answer to Question 1

The key to this question is the reciprocal nature of the problem. If residential housing was not located near the airport, then the noise pollution would not be a problem. On the other hand, if the airport had not extended its runaway, then the noise pollution would not have been such a problem. Efficiency requires that both parties have an incentive to avoid the problem. The corrective tax should correct the incentives of the airport. Paying the revenues collected from the airport as compensation to the homeowners, however, would decrease the incentives homeowners would have to avoid the current problem as well as future problems.

Answer to Question 2

D


Brittanyd9008

  • Member
  • Posts: 500
Reply 2 on: Jul 1, 2018
YES! Correct, THANKS for helping me on my review

atrochim

  • Member
  • Posts: 331
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

About 80% of major fungal systemic infections are due to Candida albicans. Another form, Candida peritonitis, occurs most often in postoperative patients. A rare disease, Candida meningitis, may follow leukemia, kidney transplant, other immunosuppressed factors, or when suffering from Candida septicemia.

Did you know?

According to research, pregnant women tend to eat more if carrying a baby boy. Male fetuses may secrete a chemical that stimulates their mothers to step up her energy intake.

Did you know?

People with alcoholism are at a much greater risk of malnutrition than are other people and usually exhibit low levels of most vitamins (especially folic acid). This is because alcohol often takes the place of 50% of their daily intake of calories, with little nutritional value contained in it.

Did you know?

About 3.2 billion people, nearly half the world population, are at risk for malaria. In 2015, there are about 214 million malaria cases and an estimated 438,000 malaria deaths.

Did you know?

The familiar sounds of your heart are made by the heart's valves as they open and close.

Find the final amount if the initial amount is 400 units. Find the final amount if the initial amount is 400 units.
Regional Blocs Regional Blocs
Regional and Global Connections Regional and Global Connections
How to know when a function is increasing or decreasing using calculus (Part 1) How to know when a function is increasing or decreasing using calculus (Part 1)
Water pollution types Water pollution types
Calculate the amount of interest that will be charged on $9000.00 borrowed for four months at ... Calculate the amount of interest that will be charged on $9000.00 borrowed for four months at ...
Video: Regulation of GFR: three methods, autoregulation & autoregulation via myogenic mechanism

For a complete list of videos, visit our video library