Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC 1 9 3E_1 MAC 2=16-2E_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: MED = E Agg In the absence of government intervention, total external damages (TED) are Answer:

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Consider two firms with the following marginal abatement costs (MAC) as a function of emissions B: MAC 1-22-2E 1 MAC 2-9-E 2 and assume marginal external damages (MED) from aggregate emissions from the two firms (E_Agg=E_1+E_2) is: MED = E_Agg. Total external damages (TED) at the socially efficient level of aggregate emissions (E_Agg) is Answer:

Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC 1 10 - .5E_1 = MAC 2 20 E_2, = - and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: MED = .5E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a cap and trade policy and sets the permit cap equal to F

Consider the following graph that shows the marginal abatement cost (MAC) curve for a coal power plan for reducing local air pollution and the marginal damage (MD) curve for those living around the coal power plant. MD (E) MAC (E b. Emissions E-0 E EL E-Max AMax Or Abatement E A-0 What are the total abatement costs at E' (enter your answer with the letters and "+" signs as "a+b+c+d+e+f", without the quotation marks. What are the total abatement costs at E-0 (enter your answer with the letters and "+" signs as as "a+b+c+d+c+f", without the quotation marks. If the property rights were with the coal power plant how much Emissions would we see? (enter one of the following, "E-0", "E", "E1", "E-Max") If the property rights were with the people how much Emissions would we see? (enter one of the following. "E-0", "E", "E1 "E-Max") What is the socially optimal level of emissions (choose from one of the following and enter as written without the quotation marks, "E-0". "E"E1 "E-Max").

Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 12 - .5E_1 MAC_2 = 12 - E_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: MED = (1/3)E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a per unit tax on emissions.  The per-unit tax on emissions is $____.

Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 12-.5E_1 MAC_2 = 12-E_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: MED = (1/3)E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a per unit tax on emissions. The per- unit tax on emissions is $ Answer:

Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 18-2E_1 MAC 2 = 12-E2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E Agg E_1+E_2) is: MED = 5E Agg. To achieve the socially efficient level of aggregate emissions (E Agg), the government institutes a perunit subsidy to abatement. The total (or combined) subsidy payment to the two firms is $_

Consider a firm that emits pollution into the air. Suppose that the marginal damage costs associated with the emissions are given by MDC -15+ 4 c, where e is the quantity of the emissions. The firm's marginal costs of abatement are given by (a) (b) 390 (c) MAC 1200 - 20 c. Determine the quantity of emissions that the firm would discharge in the absence of government policy. Determine the socially efficient level of emissions. Calculate the total costs to society for both a and b and draw a diagram illustrating these costs.