The table below gives the marginal abatement costs of three polluting firms inan industry. The industry is regulated with an emission tax of $6.Marginal abatements costs ($/ton)Emissions(tons/week)10Firm 1 Firm 2 Firm 30 02342123184.51024412366.3146018728.23842910810a. What level of emissions does each firm choose? Explain how they respond to the emissionstax.b. What are cach firm's total compliance costs? Show your work.c. What is the total level of abatement? Discuss whether this abatement is achieved at the leastcost for society.

Abatement or Reduction costs are costs of reducing environmental harm such as pollution. Marginal or…

The table below gives the marginal abatement costs of three polluting firms in an industry. The industry is regulated with an emission tax of $6. Marginal abatements costs ($/ton) Emissions (tons/week) Firm I Firm 2 Fim 3 0 00 10 9. 3 8. 4 6. 2 6 12 3 8. 18 4 10 24 12 36 3 14 60 7 2 18 72 8. 23 84

The table below gives the marginal abatement costs of three polluting firms in an industry. The industry is regulated with an emission tax of $6. Marginal abatements costs ($/ton) Emissions (tons/week) Firm I Firm 2 Fim 3 0 00 10 9. 3 8. 4 6. 2 6 12 3 8. 18 4 10 24 12 36 3 14 60 7 2 18 72 8. 23 84

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Price Qd Qs before Considering Pollution Cost Qs after Considering Pollution Cost $600 50,000 40,000 30,000 $650 45,000 45,000 35,000 $700 40,000 50,000 40,000 $750 35,000 55,000 45,000 $800 30,000 60,000 50,000 $850 25,000 65,000 55,000 $900 20,000 70,000 60,000 Refer to the above table. The externality created by the production of refrigerators was $100. However, once both the private and additional external costs were taken into consideration, the market price increased by only $50. If the external costs were $100 why did the price only increase by $50 when all costs were taken into account? Explain.
The graph illustrates the marginal abatement cost (MAC) and marginal damage cost curve (MDC) of pollution emissions. Marginal cost $62 54 35 19 15 0 23 MDC MAC 45 61 87 Quantity of pollution emissions (tons) 2. What is the socially optimal Optimal pollution emissions: 1.For the 1st unit of pollution emissions, the MAC is A. equal to the MDC. B. less than the MDC. C. greater than the MDC. quantity of pollution emissions? tons 3.A market will produce A. Less than the socially optimal quantity B. More than the socially optimal quantity C. The socially optimal quantity of pollution emissions.
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16.)The demand curve for electrical output of a coal generating power plant is Pº 17000 – QD. 1 The supply curve for the plant's electrical output is given by PS 8000 +QS. Sulfur dioxide 2 emissions from the coal plant impose an external cost equal to $3000 per gigawatt-hour of electricity generated on local residents. What is the marginal benefit of society (MBS) curve for this market? e.) MBS = 17000 – Q f.) MBS = 20000 1 g.) MBS = 8000 +Q 2 1 h.) MBS = 11000 + ÷Q 2 17.)The demand curve for electrical output of a coal generating power plant is PD 17000 – QD. = 1 The supply curve for the plant's electrical output is given by PS = 8000 +Q$. Sulfur dioxide emissions from the coal plant impose an external cost equal to $3000 per gigawatt-hour of electricity generated on local residents. What is the marginal cost of society (MCS) curve for this market? e.) MCS = 17000 – Q f.) MCS = 20000 – Q g.) MCS = 1 8000 +Q 2 1 h.) MCS = 11000 +. 2 18.)Which of the following is TRUE in a market that…
The diagram below illustrates two firms' marginal abatement cost curves for a pollutant P. Note that in the absence of any regulation each firm will emit 80 units of P. $ 16 MCA 14 12 10 8 MC^2 6 10 20 30 40 50 60 70 80 90 If a cap and trade program is introduced that reduces aggregate emissions to 40 units, what will be the equilibrium price of permits? $10. $6. We need to know the initial distribution of permits to calculate the equilibrium price of permits. $8.
The graph below illustrates the private costs and benefits of producing Trísenian, a new miracle drug. a. Draw the MSB and MSC curves on the graph below, assuming that the external benefits are estimated at $90 per unit and the external cost at $30 per unit. Plot only the endpoints of the both curves and position those points on the edges of the graphing area... Price 180 165 150 135 120 105 90 75 60 45 30 15 0 5 10 15 20 25 30 35 40 45 50 Quantity per period MPC MPB Tools MSB MSC
Firms in a polluting industry can be classified in two groups: newer firms with a cleaner technology that can abate pollution at a lower marginal cost M CLA L = (1/2) aL and older firms with dirtier M CAH = aH , where ai is the level of abatement undertaken by firms of type i = L,H. The social marginal benefit of abating pollution from this particular industry is MBA = 120 - A, where A is the aggregate level of abatement in that industry: 1. What Pigouvian tax t will implement the efficient allocation (aL; aH )? Is the resulting allocation an efficient allocation? What is the government’s tax revenue? 2. Suppose that in order to avoid the costly obtention of disaggregate information about individual firms cost, the government just implements a uniform standard aui = A*/2. Is this allocation efficient? If not, what is the deadweight loss?
The diagram below shows the marginal costs of pollution abatement for two firms, Firm 1 and Firm 2. Dollars 60 50 40 30 20- 10 0 Firm 1 MC₁ 1 1 Q₁ Q₂ Q₂ Q₁ Q₂ Q Q₁ Abatement Dollars A) each firm would abate to Q3. 60 50 40 30 20 10 FIGURE 17-5 0 B) each firm would abate to the same level. MC₂ 06) Refer to Figure 17-5. Suppose Firm 1 and Firm 2 are each abating 0 units of pollution. If the government imposed an emissions tax of $40 per unit of emissions, E) the level of pollution would be optimal. Firm 2 1 1 1 Q₁ Q₂ Q₂ Q Qs Q Q₁ Abatement C) Firm 1 would abate beyond Q3 and Firm 2 would abate less than Q3. D) Firm 2 would abate beyond Q3 and Firm 1 would abate less than Q3.
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