The supply and demand schedules for gasoline in the country of Drivia are given in the table below. Initially, there are no taxes on gasoline. Assume that the externality damage from consuming gasoline in Drivia is 30 cents per gallon. What is the price of gasoline at the competitive equilibrium in this market with no intervention (per gallon)? Quantity Supplied | Quantity Demanded Price Per Gallon| Gallons/Day Gallons/Day 53.50 45,000 135,000 53.60 50,000 125,000 53.70 55,000 115,000 53.80 60,000 105,000 53.90 65,000 95,000 54.00 70,000 85,000 54.10 75,000 75,000 54.20 80,000 65,000 54.30 85,000 55,000 54.40 90,000 45,000 54.50 95,000 35,000 Question 2 1 pts The supply and demand schedules for gasoline in the country of Drivia are given in the table below. Initially, there are no taxes on gasoline. Assume that the externality damage from consuming gasoline in Drivia is 30 cents per gallon. What is the quantity of gasoline exchanged at the competitive equilibrium in this market with no intervention (in gallons per day)? Quantity Supplied | Quantity Demanded Price Per Gallon| Gallons/Day Gallons/Day 53.50 45,000 135,000 53.60 50,000 125,000 53.70 55,000 115,000 53.80 60,000 105,000 53.90 65,000 95,000 54.00 70,000 85,000 54.10 75,000 75,000 54.20 80,000 65,000 54.30 85,000 55,000 54.40 90,000 45,000 54.50 95,000 35,000 The supply and demand schedules for gasoline in the country of Drivia are given in the table below. Initially, there are no taxes on gasoline. Assume that the externality damage from consuming gasoline in Drivia is 30 cents per gallon. What is the dollar value of the damage from the externality, in dollars per day, at the competitive outcome? Quantity Supplied | Quantity Demanded Price Per Gallon| Gallons/Day Gallons/Day $3.50 45,000 135,000 $3.60 50,000 125,000 $3.70 55,000 115,000 $3.80 60,000 105,000 $3.90 65,000 95,000 $4.00 70,000 85,000 $4.10 75,000 75,000 $4.20 80,000 65,000 $4.30 85,000 55,000 $4.40 90,000 45,000 $4.50 95,000 35,000 Question 4 1 pts The supply and demand schedules for gasoline in the country of Drivia are given in the table below. Initially, there are no taxes on gasoline. Assume that the externality damage from consuming gasoline in Drivia is 30 cents per gallon. How much is the optimal Pigovian tax on gasoline in Drivia? Quantity Supplied | Quantity Demanded Price Per Gallon| Gallons/Day Gallons/Day $3.50 45,000 135,000 $3.60 50,000 125,000 $3.70 55,000 115,000 $3.80 60,000 105,000 $3.90 65,000 95,000 $4.00 70,000 85,000 $4.10 75,000 75,000 $4.20 80,000 65,000 $4.30 85,000 55,000 $4.40 90,000 45,000 $4.50 95,000 35,000 (O $54,000 per day () 40 cents per gallon (O $48,000 per day () 30 cents per gallon O $4 per day. () 80 cents per gallon () $36,000 per day The supply and demand schedules for gasoline in the country of Drivia are given in the table below. Initially, there are no taxes on gasoline. Assume that the externality damage from consuming gasoline in Drivia is 30 cents per gallon. If Drivia instituted an optimal Pigovian tax on gasoline, what would be the new equilibrium price? Quantity Supplied | Quantity Demanded Price Per Gallon| Gallons/Day Gallons/Day 53.50 45,000 135,000 53.60 50,000 125,000 53.70 55,000 115,000 53.80 60,000 105,000 $3.90 65,000 95,000 54.00 70,000 85,000 54.10 75,000 75,000 54.20 80,000 65,000 54.30 85,000 55,000 54.40 90,000 45,000 54.50 95,000 35,000 Question 6 1 pts The supply and demand schedules for gasoline in the country of Drivia are given in the table below. Initially, there are no taxes on gasoline. Assume that the externality damage from consuming gasoline in Drivia is 30 cents per gallon. If Drivia instituted an optimal Pigovian tax on gasoline, what would be the new equilibrium guantity sold? Quantity Supplied | Quantity Demanded Price Per Gallon| Gallons/Day Gallons/Day 53.50 45,000 135,000 53.60 50,000 125,000 53.70 55,000 115,000 53.80 60,000 105,000 53.90 65,000 95,000 54.00 70,000 85,000 54.10 75,000 75,000 54.20 80,000 65,000 54.30 85,000 55,000 54.40 90,000 45,000 54.50 95,000 35,000 The supply and demand schedules for gasoline in the country of Drivia are given in the table below. Initially, there are no taxes on gasoline. Assume that the externality damage from consuming gasoline in Drivia is 30 cents per gallon. How much would Drivia collect in tax revenues with an optimal Pigovian tax (per day)? Quantity Supplied | Quantity Demanded Price Per Gallon| Gallons/Day Gallons/Day $3.50 45,000 135,000 53.60 50,000 125,000 $3.70 55,000 115,000 $3.80 60,000 105,000 $3.90 65,000 95,000 54.00 70,000 85,000 54.10 75,000 75,000 54.20 80,000 65,000 54.30 85,000 55,000 54.40 90,000 45,000 54.50 95,000 35,000 Question 8 1 pts The supply and demand schedules for gasoline in the country of Drivia are given in the table below. Initially, there are no taxes on gasoline. Assume that the externality damage from consuming gasoline in Drivia is 30 cents per gallon. If Drivia instituted an optimal Pigovian tax on gasoline, what would be the value of the externality damage after the tax (per day)? Quantity Supplied | Quantity Demanded Price Per Gallon| Gallons/Day Gallons/Day $3.50 45,000 135,000 53.60 50,000 125,000 $3.70 55,000 115,000 53.80 60,000 105,000 $3.90 65,000 95,000 54.00 70,000 85,000 54.10 75,000 75,000 54.20 80,000 65,000 54.30 85,000 55,000 54.40 90,000 45,000 54.50 95,000 35,000 Question 2 1 pts Suppose that the government of Aqualand is considering a new law that would improve drinking water quality. The cost of complying with the new regulation is $125 million. The benefits of improved drinking water are estimated to be $300 million, but these benefits will occur 20 years from now. At a discount rate of 5 percent, do you recommend that Agualand institute this new regulation? (O) There is not enough information given to answer the question. (O Yes, the benefits of the policy are greater than the $125 million cost. () No, the costs of the policy exceed the benefits. Question 10 1 pts Suppose that the government of Aqualand is considering a new law that would improve drinking water quality. The cost of complying with the new regulation is $125 million. The benefits of improved drinking water are estimated to be $300 million, but these benefits will occur 20 years from now. At a discount rate of 3 percent, do you recommend that Agualand institute this new regulation? () Yes, the benefits of the policy are greater than the $125 million cost. (O) There is not enough information given to answer the question. () No, the costs of the policy exceed the benefits. Question 11 1 pts Which one of the following statements is true? (O The farther a benefit occurs in the future, the higher is its present value. (O) The higher the discount rate on a future benefit, the lower is its present value. (O The higher the monetary value of a future benefit, the lower is its present walue