Suppose a team of economists recently measured the total economic benefits of implementing the 2015 climate agreement for several alternative levels of greenhouse gas emission reductions, dQ, as: TB = Bo + B₁ dQB2 where TB is the sum of total benefits, in trillions of US dollars, earned by current and future generations worldwide. The term dQ is the proportion reduction in greenhouse gas emissions from 2015 levels, a number that can range from 0 to 1. This would be a hard equation to validate and would open up considerable controversy, but would certainly be noticed. Suppose your team also measured the total economic costs of achieving the same possible proportions of GHG reductions as: IC = Co + Cı * dQ Your mission: Please calculate what proportion, dQ maximizes the difference between total benefits TB) and total costs (TC). Use calculus, a table, excel dsheet. All give the same answer. Assume these data are accurate for the six terms (parameters) above: 3o = 12; B₁ = 140; B₂ = 0.5; Co= 10; C₁ = 90; C₂ = 2.0

Suppose a team of economists recently measured the total economic benefits of implementing the 2015 climate agreement for several alternative levels of greenhouse gas emission reductions, dQ, as: TB = Bo + B₁ dQB2 where TB is the sum of total benefits, in trillions of US dollars, earned by current and future generations worldwide. The term dQ is the proportion reduction in greenhouse gas emissions from 2015 levels, a number that can range from 0 to 1. This would be a hard equation to validate and would open up considerable controversy, but would certainly be noticed. Suppose your team also measured the total economic costs of achieving the same possible proportions of GHG reductions as: IC = Co + Cı * dQ Your mission: Please calculate what proportion, dQ maximizes the difference between total benefits TB) and total costs (TC). Use calculus, a table, excel dsheet. All give the same answer. Assume these data are accurate for the six terms (parameters) above: 3o = 12; B₁ = 140; B₂ = 0.5; Co= 10; C₁ = 90; C₂ = 2.0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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