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3 years ago

What is the difference between command-and-control policies and market-based policies toward externalities?

Business

1 answer:

Allushta [10]3 years ago

5 0

Answer:

Command & Control are regulatory mechanisms. Market Based Policies are incentive based mechanisms.

Explanation:

Command & Control ; Market Based Policies - are approaches used to solve the market failure from Externalities (Eg: Negative Externality - Pollution).

Command & Control : implies setting maximum ceiling limit of releasing negative externality (eg - harmful pollutant gases, here) by all individual firms. As mentioned, it has regulation in its essence.

Market Based Policies : imply setting of maximum ceiling limit for 'all as a whole' & allowing them to trade permits for releasing - harmful pollutant gases. Here; the opportunity control of each emission is - lost extra tax paid, lost subsidy, lost price at which that emission could be sold in market.

So, externality reduction in this case is not owing to any regulation, but self incentive of monetary gain in this case.

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Although the Chen Company's milling machine is old, it is still in relatively good working order and would last for another 10 y

lora16 [44]

Answer:

Chen should buy the new machine since it produces a positive NPV of $1,294

Explanation:

Summary of the Project Cash Flows is as follows :

Year 0 = ($120,000)

Year 1 to Year 10 = $18,900

The Project cost of capital = 9%

Calculation of the Project`s NPV :

NPV can be calculated from this summary using a financial calculator as :

CF0 = ($120,000)

CF1 = $18,900

Nj = 10

i = 9 %

NPV = ?

NPV = $1,293.73 or $1,294

The Project is accepted only if it has a Positive NPV

Conclusion,

Chen should buy the new machine since it produces a positive NPV of $1,294.

5 0

3 years ago

The Burkes pay their babysitter $5 per hour before 11 P.M. and $7.50 after 11 P.M. One evening they went out for 4 hr and paid

stiks02 [169]

Answer:

They came back home at 12 pm

Explanation:

Giving the following information:

The Burkes pay their babysitter $5 per hour before 11 P.M. and $7.50 after 11 P.M. One evening they went out for 4 hr and paid the sitter $27.50.

We need to formulate the total cost:

TC= 5*x + 7.5*y

x=5*4= 20

y=7.5*1= 7.5

TC= 5*4 + 7.5*1= $27.5

They came back home at 12 pm

4 0

3 years ago

A manufacturer reports the following costs to produce 10,000 units in its first year of operations:

rewona [7]

Answer:

Option (C) is correct.

Explanation:

Variable overhead per unit:

= Variable overhead ÷ Total units produced

= $70,000 ÷ 10,000

= $7 per unit

Fixed overhead per unit:

= Fixed overhead ÷ Total units produced

= 120,000 ÷ 10,000

= $12 per unit

Total product cost:

= Direct materials + Direct labor + Variable overhead + Fixed overhead

= 10 + 6 + 7 + 12

= $35 per unit

7 0

3 years ago

Beginning three months from now, you want to be able to withdraw $2,800 each quarter from your bank account to cover college exp

mr Goodwill [35]

Answer:

You will need to have $ 55,006.94

Explanation:

We need first to consider the following details according to the problem

We have a Annuity amount of $ 2900, a Rate(r)= 0.51%, and a Time(n)= 5 years (or 20 quarters ) .

To reach to the money that we would need to have in the bank today to meet the expense over the next four years we use the following formula:

PVA= annuity amount × [1 - (1 / (1 + r)n)] / r

PVA= $ 2900 x[ 1-{ 1/(1+0.0051)20)]/0.0051

PVA= $ 55,006.94

4 0

3 years ago

Turnbull Co. is considering a project that requires an initial investment of $1,708,000. The firm will raise the $1,708,000 in c

exis [7]

Answer:

The weighted cost of capital for the project which is also the project discount rate is 10.12%

Explanation:

WACC=Ke*E/V+Kd*D/V*(1-t)+Kp*P/V

Ke is the cost of equity of 13.2%

Kd is the cost of debt of 8.7%

Kp is the cost of preferred stock of 9.9%

E is the market value of equity raised of $880,000

D is the market value of debt issued of $750,000

P is the amount of preferred stock sold to investors of $78,000

V is the sum of the market values above=$880,000+$750,000+$78,000=$1708000

WACC=(13.2%*880,000/1708,000)+(8.7%*750,000/1708,000*(1-0.25))+(9.9%*78,000/1708000)=10.12%

8 0

3 years ago