QUESTION 2 The marginal (external) damage cost from air pollutant emission is MD = 20 + Q where Q is the quantity units of pollutants emitted. The marginal control cost associated with pollution cleanup is MC = 200-5Q. . The total control cost at the The total damage cost at the optimal pollution is optimal pollution is Hint: Type integers without thousands separators.

QUESTION 2 The marginal (external) damage cost from air pollutant emission is MD = 20 + Q where Q is the quantity units of pollutants emitted. The marginal control cost associated with pollution cleanup is MC = 200-5Q. . The total control cost at the The total damage cost at the optimal pollution is optimal pollution is Hint: Type integers without thousands separators.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Marginal Damages of Pollution: MD = 40 Marginal Abatement Cost: MAC = 100 -2Q e. Calculate and compare the change in welfare for Mr. Peabody's coal plant under the efficient tax and efficient subsidy (i.e. the difference in the plant's welfare under a tax (subsidy) compared to no policy at all).
3. Suppose the EPA wants to reduce pollution to the socially optimal level. Based on the data in the table below, what is the optimal level of pollution? Total cleanup Total Total (tons) Benefit Cost 50 2 85 18 3 115 28 4 140 39 5 160 51 179 63 7 197 76 8 214 90 230 105 10 245 120 11 259 137 12 273 156 13 286 177 14 299 200 15 311 225
Please help with the calculations & working :) In this question there is a diagram with ‘y’ being the vertical axis representing costs/damages, and ‘P’ being a horizontal axis representing pollution. Abatement is the opposite of pollution, so if pollution falls from, say, 3 to 1 abatement rises by 2. 1. Suppose the marginal damage curve to private firms is MDP: y=0 and the marginal cost of abatement is MCA: y=1-P if P<1 and y=0 otherwise, where y is the vertical axis on a cost/damage scale, and P is the amount of pollution. Plot these curves and the equilibrium amount of pollution which is privately optimal for the firm. 2. Why is the marginal cost of abatement is downward sloping (with increasing pollution measured on the bottom axis as you go right). Give an example where this is a reasonable assumption 3. Suppose the marginal damage to society is MDS: y=P. Calculate the socially optimal amount of pollution. What ethical system does the ‘optimal amount of pollution’ belong? To…
Consider regions A and B. In region A, the marginal benefit associated with pollution cleanup is MB = 300 – 10Q, while in region B, the marginal benefit associated with pollution cleanup is MB = 200 – 4Q. Suppose that the marginal cost of cleanup is constant at $12 per What is the optimal level of pollution cleanup in each of the two regions?
Externalities: Suppose the daily inverse demand curve for gasoline in Portland is given by P = $100 – Q, the MC = 1.5Q, and the EMC = 1.5Q. Q is measured in thousands of gallons of gasoline per day. a. Graph the demand, marginal cost, and external marginal cost functions. b. How many gallons will be consumed per day if gasoline consumers do not consider the EMC of gasoline? c. How many gallons of gasoline will be consumed per day if gasoline consumers consider the EMC.
No hand written solution Afirm has an industrial plant that emits pollutants into a town’s lake. The plant’s marginal abatement function is MAC= 200 – 0.5E and damages caused by its emissions are given by MD = 2E where emissions are in kg. per day. What is the socially efficient level of emissions from this plant? Illustrate this in a graph. As an incentive to reduce emissions to the socially efficient level, government offers to pay the firm for each kg. of emissions it abates per day from this plant. What subsidy per kg. should the government offer? If the plant abates to the socially efficient level of emissions, what total subsidy payment would the firm receive? Identify the area in your graph. How much better or worse off would the firm be compared to if it did no abating? Identify the area in your graph. What would be the net benefit to society if we pay the firm to reduce the plant’s emissions to the socially efficient level? Identify this area in your graph.
If the correct amount of pollution is being produced now, which of the following is true? The average cost of pollution: a. is exactly equal to the average cost of the pollution reduction.b. can be greater than, equal to, or less than the costs of pollution reduction.c. reduction is greater than the cost of the pollution at all levels of pollution.d. reduction is less than the cost of the pollution at all levels of pollution.
1. A firm's marginal abatement cost function is given by MAC = 200-5E. Suppose that, after adopting new abatement technology, the firms marginal abatement function becomes MAC = 160-4E. Costs are in dollars per tonne and emissions are in tonnes per year. The firm is given 20 tradeable pollution permits (each permit allows it to emit one tonne of pollution) and the current market price per permit is $100. a)Given no change in the permit price how many tonnes of pollution will the firm emit? b)What will be the firms total abatement cost? Will it buy or sell permits and how many? c) What will be the net cost to the firm after trading? What will be the net gain to the firm from adopting the new abatement technology
A steel plant causes about 100 tons of pollution to be released for every 100 tons of steel. Every ton of pollution causes $4 worth of damage to the local town. The MC(Q)=27Q, What is the SMC(Q) for steel? O SMC(Q)=27Q+ 4Q O SMC(Q)=27Q+ 400 O SMC(Q)=27Q+ 4 O SMC(Q)=27Q+ 400Q
There are two towns, A and B, each with a plant emitting pollution. The emission from plant Ais uniformly distributed across both town A and B. The emissions from plant B are local to town B. Despite the difference in affected area, the marginal benefit to either town of abating one unit of pollution from either source is the same, MB(Qi) = 17 − Qi per person, where Qi is total emissions abated from town i’s air. The marginal cost of abatement at plants A and B are MCA(qA) = 200qA and MCB(qB) = 100qB, respectively. If town A has 300 citizens and town B has 200, what is the efficient tax to set at each plant?
The optimal level of pollution reduction is that level at which… Multiple Choice: a.) the total benefit of pollution reduction exceeds the total cost of pollution reduction by the greatest amount. b.) the marginal benefit of pollution reduction exceeds the marginal cost of pollution reduction by the greatest amount. c.) the total cost of pollution equals the total cost of pollution reduction. d.) pollution is eliminated entirely.
Which of the following statements is incorrect? Select one: O Local pollutants cause damage near the source of emissions. O Regional pollutants cause damage at distances beyond the source of emissions. Global pollutants affect the entire planet. O The horizontal zone refers to whether the pollution damages are at ground level or the upper atmosphere.