please mark social cost on graph 1.5,2,2.5,3,3.5,4,4.5,5,5.5 1.5,2,2.5,3,3.5,4,4.5,5,5.5 subsidy / tax $$ amount subsidy / tax The market equilibrium quantity is units of electric cars, but the socially optimal quantity of electric car production is units. To create an incentive for the firm to produce the socially optimal quantity of electric cars, the government could impose a per unit of electnic cars. For each policy listed, identify whether it is a command-and-control policy (regulation), tradable permit system, corrective subsidy, or corrective tax. Trees take carbon dioxide out of the air and convert it to oxygen, so the government funds a tree-planting initiative by offering $270 to any citizen who plants a tree. The government charges factories $270 for every ton of carbon dioxide they emit. The government limits total carbon-dioxide emissions by all factories to 240,000 tons per year. Each individual factory is given the right to emit 220 tons of carbon dioxide, and factories may buy and sell these rights in a marketplace. The government orders every factory to adopt a new technology, which reduces carbon-dioxide emissions into the atmosphere. Which of the following arguments best describes why the majority of economists would disagree with this policy? The opportunity cost of zero pollution is much higher than its benefit. The environment isn't worth protecting. Society would not benefit from lower air pollution. Reducing methane emissions is desirable, but whatever levels of pollution firms decide to emit privately are already efficient. Automotive assembly plants emit particulate matter as a waste product. This generates a cost to society that is not paid for by the firm; therefore, pollution is a negative externality of vehicle production. Suppose the U.S. government wants to correct this market failure by getting firms to internalize the cost of pollution. To do this, the government can charge firms for pollution rights (the right to emit a given quantity of particulate matter). The following graph shows the daily demand for pollution rights. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly, Graph Input Tool Daily Demand for Pollution Rights II Price (Dollars per ton) Suppose the government has determined that the socially optimal quantity of particulate matter is 200 million tons per day. One way governments can charge firms for pollution rights is by imposing a per-unit tax on emissions. A tax (or price in this case) of of particulate matter emitted will achieve the desired level of pollution. Now suppose the U.S. government does not know the demand curve for pollution and, therefore, cannot determine the optimal tax to achieve the desired level of pollution. Instead, it auctions off tradable pollution permits. Eac.