Much of the nation's coal is extracted by strip mining. This process leaves a huge barren hole in the ground when complete, and the cost of replanting the trees is approximately $10 per ton of coal. Burning the coal for electricity causes air pollution. No one knows how much damage the air pollution causes, but we know that for another $10 per ton the power plant can be outfitted with a pollution control device. What is one measure of the true social cost of coal fired electricity, in dollars per ton?
A) Private marginal cost plus the $10 replanting charge.
B) Private marginal cost plus the $10 emission control charge.
C) Only the $20 of replanting and emission control charges, because the other costs are private, not social.
D) Private marginal cost plus the $20 of replanting and emission control charges.
E) In order to answer this question we need to know the dollar value of the pollution.
Correct Answer:
Verified
Q187: The existence of an externality is proof
Q188: Which of the following statements is not
Q189: When there are positive externalities associated with
Q190: Voluntary recycling is available in many parts
Q191: Most economists believe that there are positive
Q193: Which of the following are not methods
Q194: When airplanes take off and land at
Q195: Denise is thinking about setting up a
Q196: Nonsmoking sections in restaurants are designed to
Q197: Suppose the government imposes a per unit
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents