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reduce pollution effectively. How to the methods of targeting the companies need make bigger cuts? 7. Multiple identical residents of Whoville love drink Zlurp. Each resident has the following willing to pay for the tasty refreshments: The first bottles $ 5 the second bottle 4 three bottles 3 the fourth bottle 2 Thursday, 1 bottle more bottles 0 a. Zlurp production cost is $ 1.50, and the vendors compete to sell at this price. (The horizontal supply line.) How many Whovillian each bottle will consume? What's consumer surplus of each is? b. production of Zlurp creates pollution. Each the bottle has a cost of $ 1. Taken this additional costs into account, the total number is what redundancies each of the allocation you described in part (a)? c. Cindy Lou Who, one of the residents of Whoville, her decision to reduce her Zlurp consumption by a bottle. What happens to the well-being of its consumers (Cindy excess of cost of the her pollution experience)? How to get Cindy's decision affect the total surplus in Whoville? d. Mayor Grinch imposed taxes $ 1 Zlurp. consumption per person was the what now? As the consumer surplus, external costs, the Government's revenue, and total surplus per inhabitants. e. Based on your calculations, you will support the policies of the Mayor? Why and why not? 8. Ringo likes to play rock 'n' roll in high volume. Luciano in love and hate opera Rock ' n ' roll. Unfortunately, they are next door neighbors in an apartment building with walls as thin as paper. a. External factors: what is here? b. what command and control policies can be the landlord imposes? Can such a policy guide a result is not effective? c. assume the landlord allows the tenant do whatever they want to. According To Coase Li, how Ringo and Luciano can achieving an effective outcome on its own?
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