A bill is proposed that would lower tar and nicotine levels in all cigarettes. The smoker will most likely try to maintain a constant level of consumption ofnicotineandwilincea e his or her may not benefit from this plan if the total amount of tar and niootine released into the air is the same. A tax is levied on each pack of cigarettes sold. Smokers might turn to cigars.pipes or might start rolling their own cigarettes.The extent of the effect of a tax on cigarette consumption depends on the elasticity of demand for cigarettes.Again,it is questionabe whether society will benefit. Smokers would be required to carry government issued smoking permits at all times. Smoking permits would effectively transfer property rights to can airfrom smokers to non-smokers The main obstacle to society benefiting from such a proposal would be the high cost of enforcing a smoking permits system. In addition,the cost of the permit raises the effective price of the cigarettes and the resulting affecton quantity smoked will depend on the elasticity of demand. 6.The market for paper in a particular region in the United States is characterized by the following demand and supply curves Q-160,000-2000 P and=40,000+2000P where o is the quantity demanded of paper in 100 Ib.lots,s is the quantity demanded of paper in 100 lb.lots,and P is the price per 100 Ib.lot of paper Currently there is no attempt to regulate the dum ing of ef uent into str and rivers by the pape a result,dumping is widespread. marginal external cost (MEC)associated with the production of paper is given by the curve Calculate the output and price of paper if it is produced under competitive conditions and no attempt is made to monitor or regulate the dumping of effluent. The equilibrium price and output would be where quantity demand is equal quantity supplied: 160,000-2000P=40,000+2000P 4000P=120,000 P=$30 per 100 Ib.lot Q=100.000 lots of 100 Ib.each a. A bill is proposed that would lower tar and nicotine levels in all cigarettes. The smoker will most likely try to maintain a constant level of consumption of nicotine, and will increase his or her consumption of cigarettes. Society may not benefit from this plan if the total amount of tar and nicotine released into the air is the same. b. A tax is levied on each pack of cigarettes sold. Smokers might turn to cigars, pipes, or might start rolling their own cigarettes. The extent of the effect of a tax on cigarette consumption depends on the elasticity of demand for cigarettes. Again, it is questionable whether society will benefit. c. Smokers would be required to carry government issued smoking permits at all times. Smoking permits would effectively transfer property rights to clean air from smokers to non-smokers. The main obstacle to society benefiting from such a proposal would be the high cost of enforcing a smoking permits system. In addition, the cost of the permit raises the effective price of the cigarettes and the resulting affect on quantity smoked will depend on the elasticity of demand. 6. The market for paper in a particular region in the United States is characterized by the following demand and supply curves QD = 160,000 − 2000P and QS = 40,000+ 2000P, where QD is the quantity demanded of paper in 100 lb. lots, QS is the quantity demanded of paper in 100 lb. lots, and P is the price per 100 lb. lot of paper. Currently there is no attempt to regulate the dumping of effluent into streams and rivers by the paper mills. As a result, dumping is widespread. The marginal external cost (MEC) associated with the production of paper is given by the curve . a. Calculate the output and price of paper if it is produced under competitive conditions and no attempt is made to monitor or regulate the dumping of effluent. The equilibrium price and output would be where quantity demand is equal to quantity supplied: 160,000-2000P=40,000+2000P 4000P=120,000 P=$30 per 100 lb. lot Q=100,000 lots of 100 lb. each