Two firms (A and B) run separate mining companies in the same forest. Both pollute the river flowing through the forest with debris. Currently, eachcompany releases 50 pounds of debris per month into the river. The table below shows the costs associated with reducing debris in 10-poundincrements.Total cost of reducing debris by 10 poundsTotal cost of reducing debris by 20 poundsTotal cost of reducing debris by 30 poundsTotal cost of reducing debris by 40 poundsTotal cost of reducing debris by 50 poundsFirm A Firm B$5 $2$15$6$30$12$50$20$75$30 Suppose the government wants to achieve a debris reduction of 30 pounds per month (that is, reduce the amount of debris to 70pounds). Assume that if a firm is indifferent between buying a debris permit or reducing pollution, it will choose to buy thepermit. Suppose the government issues seven 10-pound permits. To release debris, a firm must hold a permit for every 10 pounds ofdebris. If all permits are sold off to the firms at a single price per permit, every month the price would be between $(lowend) and $(high end).ww

Pollution prevention is any training that lessens, dispenses with, or forestalls contamination at…

Suppose the government wants to achieve a debris reduction of 30 pounds per month (that is, reduce the amount of debris to 70 pounds). Assume that if a firm is indifferent between buying a debris permit or reducing pollution, it will choose to buy the permit. Suppose the government issues seven 10-pound permits. To release debris, a firm must hold a permit for every 10 pounds of debris. If all permits are sold off to the firms at a single orice per permit, every month the price would be between $ (low end) and S (high end).

Suppose the government wants to achieve a debris reduction of 30 pounds per month (that is, reduce the amount of debris to 70 pounds). Assume that if a firm is indifferent between buying a debris permit or reducing pollution, it will choose to buy the permit. Suppose the government issues seven 10-pound permits. To release debris, a firm must hold a permit for every 10 pounds of debris. If all permits are sold off to the firms at a single orice per permit, every month the price would be between $ (low end) and S (high end).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A local school administrator observes an increase in the number of flu cases in the public schools over the last two years. She is concerned that some families cannot afford flu vaccine and are therefore not having children vaccinated. She is also concerned that the failure to vaccinate some children is putting other children at risk, so she proposes that the state subsidize vaccines to increase coverage rates. a. Determine whether the failure to vaccinate some children is an external benefit or an external cost. If an external cost is present, move point A and point B to show the marginal social cost curve. If an external benefit is present, move point A and point B to show the marginal social benefit curve. Place point C at the equilibrium outcome. Place point D at the socially optimal outcome. Flu vaccines A B D Supply (marginal private cost) Price
4
Solve it correctly when you know complete solution not the wrong
There are three industrial firms in a town Firm Initial Pollution Level Cost of Reducing Pollution by 1 Unit A 30 units $20 40 units 20 units B с $30 $10 The government wants to reduce pollution to 60 units, so it gives each firm 20 tradable pollution permits. 1. Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation? 2. How much higher would the costs of pollution reduction be if the permits could not be traded?
Explain the negative externalities by clarifying the drawing
Im confused on this question.
…………………… requires that the potential and actual costs of pollution should be borne by the person or organization responsible for causing environmental pollution ISO 14001 Product stewardship Eco-efficiency Polluter Pays Principle (PPP
cap-and-trade and windfall profitsA city called Seoul is suffering from high concentrations of mercury in the air, caused by burningcoal in power plants. There are two of these plants close to the city. The city’s mayor wants touse cap-and-trade to reduce emissions to a reportedly “safe” level of 60 tons. The two firms havethe following marginal benefits of emissions: MB1 = 100 – 2e1, MB2 = 25 – 0.5e2.a. How much mercury will each firm emit? What allowance price will prevail in themarket?Firm 2 hires a smart lobbyist who convinces the government that its profits are relatively low andthat it therefore deserves a generous allowance allocation. The government agrees and allocatesa1 = 20 allowances to firm 1 (for free) and a2 = 40 allowances to firm 2 (for free).b. What are the firms’ profits? Do any of the firms earn windfall profits? [Hint: compareprofits with and without regulation.] Windfall profits have been sharply criticized by consumer advocacy groups and politicians.c. What can…
The market for plasticans is perfectly competitive. Market Supply is givenby Q=4P and Market Demand is given by Q=368-2P. Each extra unit ofplastican produced creates a positive externality of $5. What is theefficient quantity? Efficient quantity is determined by setting Marginal Social Costs(=Marg. Pvt. Cost + Marg. External Cost.) equal to Marg. SocialCost=MWTP which is captured by the Demand curve
Define pollution charge and will our economy be able to control pollution? Share your thoughts in a paragraph.
Suppose the the government has set the trading price of a permit at $126 per permit. Complete the following table with the action each firm will take at this permit price, the amount of pollution each firm will eliminate, and the amount it costs each firm to reduce pollution to the necessary level. If a firm is willing to buy two permits, assume that it buys one permit from each of the other firms. (Hint: Do not include the prices paid for permits in the cost of reducing pollution.) Firm Firm A Firm B Firm C Initial Pollution Permit Allocation (Units of pollution) 2 2 2 Regulation Versus Tradable Permits Action Proposed Method Regulation Tradable Permits Final Amount of Pollution Eliminated (Units of pollution) Cost of Pollution Reduction (Dollars) Determine the total cost of eliminating six units of pollution using both methods, and enter the amounts in the following table. (Hint: You might need to get information from previous tasks to complete this table.) Total Cost of Eliminating…
Imagine a firm’s marginal abatement cost function with existing technologies is: MAC = 100 – 2E. If the firm adopts new pollution abatement technologies, its marginal abatement cost function will be: MAC = 50 – E. If the government raises the tax on emissions from $4 to $12, the benefits of adopting the new technologies increase by $____