marginal willingness to pay for pollution abatement, A, for each consumer class. (Abatement is reduction is pollution; zero abatement would be associated with the uncontrolled level of pollution.) Find the aggregate marginal willingness to pay for abatement. Again starting from the uncontrolled level of pollution, what is the firm's mar- ginal cost of pollution abatement? What is the optimal level of A? е. f. Are the problems of optimal provision of the public bad (pollution) and the pub- lic good (abatement) equivalent? Explain why or why not. 6.) Consider the problem of carbon dioxide emissions. We will abstract away from the problem slightly OECD (O) and the rest of the world (R). Suppose the marginal cost of controlling CO2 emissions is $10 per ton of emis sions. Let the marginal willingness to pay for pollu- tion reduction be 13- Q for region O and 12-2Q for region R, where Qis the amount aUof pollution reduction. The United Nations is considering two proposed methods for controlling CO, emissions, both involving polluters paying for the damage they cause. Proposal A involves the polluters paying damages to each region for the pollu- tion generated. Proposal B involves the polluters in each region independently nego- tiating pollution reductions, assuming the other region is not undertaking pollution reduction. assuming there are polluters and consumers in two regions, the Graph the marginal abatement cost and the total marginal willingness-to-pay schedules. What is the socially efficient level of emission reductions, Q? а. How much total pollution reduction will occur under proposal A and what will be the total compensation received by regions O and R? If those payments were instead placed in the general coffers of the UN, would the outcome be any different from an efficiency point of view? Why or why not? How much pollution would be generated under proposal B? Explain any differ- ences between this answer and the answer to parts (a) and (b). osls b. h C. 7. In the manner of Figure 5.8, draw a set of indifference curves such that an individ- ual's private provision of the public good increases as the number of people in the society increases. Explain your result. Are these indifference curves plausible? aonu V 7. Read Gramlich, Ch 8 pp. 143-148 discussion of the Te just the Tellico Dam section) and OMB Circular A4. Bo Benefits" section. J Bring two hard copies of a properly formatted and updat