Please no written by hand Questions1. Consider the case of greenhouse gas (GHG) sequestration (removal from the atmo-sphere) as a public good. Suppose there are 100 identical countries, each of whichhas an identical inverse demand function for carbon removal given by p = 20 - QD,where QD be the number of tons of GHGs removed from the atmosphere, and p isthe marginal willingness to pay for removing carbon. Assume the marginal cost ofsequestering GHGs is constant and $50 per ton.(a) Find the aggregate willingness to pay function for global greenhouse gas seques-tration. Graph this function, label all axis and intercepts.(b) How many tons of GHGs should be sequestered in order to maximize total globalsurplus (achieve allocative efficiency)?(c) Find the economic surplus (i.e. total surplus). What is the total net benefit to allcountries of sequestering the amount found in part (b)?

We will do all three calculations list is below:(a) The aggregate willingness to pay function for…

(a) Find the aggregate willingness to pay function for global greenhouse gas seques- tration. Graph this function, label all axis and intercepts. (b) How many tons of GHGs should be sequestered in order to maximize total global surplus (achieve allocative efficiency)? (c) Find the economic surplus (i.e. total surplus). What is the total net benefit to all countries of sequestering the amount found in part (b)?

(a) Find the aggregate willingness to pay function for global greenhouse gas seques- tration. Graph this function, label all axis and intercepts. (b) How many tons of GHGs should be sequestered in order to maximize total global surplus (achieve allocative efficiency)? (c) Find the economic surplus (i.e. total surplus). What is the total net benefit to all countries of sequestering the amount found in part (b)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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