Question

am 2 Time Left:2:49:52 Gees Attempt 1 Question 23 (1 point) Saved With pollution permits, what is the nature of the supply curve for pollution rights? O elastic O perfectly elastic O inelastic O perfectly.melastic Question 24 (1 point) Saved AS-20 9:16

Answer 1

Ans. 23. With pollution permits, the nature of the supply curve for pollution rights is perfectly inelastic .

Because -

• the position of the demand curve determines the price of pollution and

• the quantity of pollution is fixed by the number of permits.

Ans. 31. the greatest difficulty with cost-benefit analysis of a public project is determining the value or benefit of the project .

  Because, the goal of cost-benefit analysis is to estimate the total costs and benefits of the project to society as a whole. In a private good market, buyers reveal the value they want on it by the prices they are willing to pay and at the same time, sellers reveal their costs by the prices they are willing to accept. The equilibrium takes place. By contrast, in case of public project the cost-benefit analysts do not have any price signals to observe, evaluate and judge the project and also it is uncertain that how much the public/society will be benefitted by that project.

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