Suppose a given country has an Environmental Kuznet’s Curve of the following form:

SO2/person = 100 + 200(income/person) – 0.005(income/person)2.

If income per person increased by $1,000 from $10,000 to $11,000, what would happen to SO2 per person?

Question

Suppose a given country has an Environmental Kuznet’s Curve of the following form:

SO2/person = 100 + 200(income/person) – 0.005(income/person)2.

If income per person increased by $1,000 from $10,000 to $11,000, what would happen to SO2 per person?

BlackTom AI · Accepted Answer

We start by identifying the given Kuznets curve equation and the income change: SO2 per person = 100 + 200*(income) − 0.005*(income)^2, with income rising from 10,000 to 11,000. To assess the effect, we can compare the SO2 values at the two income levels.

Option 1: 'SO2 per person would increase.' To verify, compute the two values:
- At income = 10,000: SO2 = 100 + 200*(10,000) − 0.005*(10,000)^2 = 100 + 2,000,000 − 500,000 = 1,500,100.
- At income = 11,000: SO2 = 100 + 200*(11,000) − 0.005*(11,000)^2 = 100 + 2,200,000 − 605,000 = 1,595,100.
The latter is higher by 95,000, so SO2 per person indeed increases with the income rise.

Option 2: 'The direction of SO2 cannot be determined with the information provided.' This is incorrect because the exact functional form is given, and evaluating it at the two incomes shows a definite increase, leaving no ambiguity.

Option 3: 'SO2 per person would decrease.' The explicit calculations above show a rise, not a fall, so this statement is false.

Option 4: 'SO2 per person would not change.' Since the computed values are different (1,500,100 vs 1,595,100), this option is incorrect.

In summary, the numerical evaluation demonstrates an increase in SO2 per person when income per person increases from 10,000 to 11,000 under the provided curve.

ECON4330850.1251 Exam 3

Suppose a given country has an Environmental Kuznet’s Curve of the following form: SO2/person = 100 + 200(income/person) – 0.005(income/person)2. If income per person increased by $1,000 from $10,000 to $11,000, what would happen to SO2 per person?

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