2.) Suppose that a nursery (grows plants) is located next to a paper mill that emits...

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2.) Suppose that a nursery (grows plants) is located next to a paper mill that emits air pollutants. This air pollution is harming the growth of the plants in the nursery. More specifically, the air pollution emitted costs the nursery $300 per drum of paper produced. a.) Is this air pollution a pecuniary or technological (real) externality? Is it a positive or negative externality? Be sure to answer both of these questions. b.) Using the graph provided on the next page, draw in the Marginal External Cost or Benefit curve and the appropriate Social Marginal Cost or Social Marginal Benefit Curve. Find the efficient quantity of paper produced, the actual quantity of paper produced, the efficient price, and the actual price. Actual Market Quantity Produced: Economically Efficient Quantity: Actual Market Price: Efficient Price: 2.) Suppose that a nursery (grows plants) is located next to a paper mill that emits air pollutants. This air pollution is harming the growth of the plants in the nursery. More specifically, the air pollution emitted costs the nursery $300 per drum of paper produced. a.) Is this air pollution a pecuniary or technological (real) externality? Is it a positive or negative externality? Be sure to answer both of these questions. b.) Using the graph provided on the next page, draw in the Marginal External Cost or Benefit curve and the appropriate Social Marginal Cost or Social Marginal Benefit Curve. Find the efficient quantity of paper produced, the actual quantity of paper produced, the efficient price, and the actual price. Actual Market Quantity Produced: Economically Efficient Quantity: Actual Market Price: Efficient Price:

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a The air pollution emitted by the paper mill that harms the growth of the plants in the nursery represents a negative externality This is because the ... View the full answer