Use the following news clip to work Problems 6 to 8. Bag Revolution Thin plastic shopping bags aren't biodegradable and often end up in the ocean or in trees. Americans use about 110 billion bags a year. In 2007, San Francisco required all retailers with revenue over $2 million to offer only compostable or reusable bags. In all, 28 U.S. cities have proposed laws restricting the use of plastic bags.

Source: Fortune, May 12, 2008.

6. a. Describe the externality that arises from plastic bags.

b. Draw a graph to illustrate how plastic bags  create deadweight loss.

7. a. With 70 percent of all plastic bags coming from grocery, drug and convenience stores, inJuly 2008, Seattle imposed a tax of 20¢ per bag from these outlets. Explain the effects of Seattle's policy on the use of plastic bags.

b. Draw a graph to illustrate Seattle's policy and show the change in the deadweight loss that arises from this policy.

8. In 2010, the Governor of California supported a move to make California the first state in the nation to ban plastic shopping bags. He said that the bill "will be a great victory for our environment." Explain why a complete ban on plastic bags might be inefficient.