Suppose the government decides to give each ferry line 50 tradable permits. Each permitallows a ferry line to produce one unit of pollution.c. The firm that values the permits most is [ Select ]The firm that would place the lowest value on its permits is[ Select ]d. When the ferry lines trade permits, the firm which values them the most will buy from thefirm that values them the least. With this in mind, which firm will sell permits and which willbuy? How many permits will be bought/sold?Firm A will [ Select ]Firm B will [ Select ]Firm C will[ Select ] Problem 3: Tradable PermitsThere are three major ferry lines operating on the East River, each generating 100 units ofpollution per year. The ferry lines face the costs of reducing pollution that are shown in thetable below.Cost of reducing pollution by1 unit$1,500$2,500$1,800Ferry lineВThe government has decided it wants to reduce pollution levels by 50 percent and requireseach ferry line to cut its pollution in half.a. Determine the cost of pollution reduction for each ferry line.Ferry LineTotal cost of cutting pollution in halfА2$В2$C2$b. What is the total cost of pollution reduction?2$ABC

There are three major ferry lines operating on the East River, each generating 100 units of pollution per year. The ferry lines face the costs of reducing pollution that are shown in the table below. Cost of reducing pollution by 1 unit $1,500 $2,500 $1,800 Ferry line В The government has decided it wants to reduce pollution levels by 50 percent and requires each ferry line to cut its pollution in half. a. Determine the cost of pollution reduction for each ferry line. Ferry Line Total cost of cutting pollution in half A 2$ 2$ C 2$ b. What is the total cost of pollution reduction? 2$ ABC

There are three major ferry lines operating on the East River, each generating 100 units of pollution per year. The ferry lines face the costs of reducing pollution that are shown in the table below. Cost of reducing pollution by 1 unit $1,500 $2,500 $1,800 Ferry line В The government has decided it wants to reduce pollution levels by 50 percent and requires each ferry line to cut its pollution in half. a. Determine the cost of pollution reduction for each ferry line. Ferry Line Total cost of cutting pollution in half A 2$ 2$ C 2$ b. What is the total cost of pollution reduction? 2$ ABC

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Suppose the government decides to give each ferry line 50 tradable permits. Each permit
allows a ferry line to produce one unit of pollution.
c. The firm that values the permits most is [ Select ]
The firm that would place the lowest value on its permits is
[ Select ]
d. When the ferry lines trade permits, the firm which values them the most will buy from the
firm that values them the least. With this in mind, which firm will sell permits and which will
buy? How many permits will be bought/sold?
Firm A will [ Select ]
Firm B will [ Select ]
Firm C will
[ Select ]

Problem 3: Tradable Permits
There are three major ferry lines operating on the East River, each generating 100 units of
pollution per year. The ferry lines face the costs of reducing pollution that are shown in the
table below.
Cost of reducing pollution by
1 unit
$1,500
$2,500
$1,800
Ferry line
В
The government has decided it wants to reduce pollution levels by 50 percent and requires
each ferry line to cut its pollution in half.
a. Determine the cost of pollution reduction for each ferry line.
Ferry Line
Total cost of cutting pollution in half
А
2$
В
2$
C
2$
b. What is the total cost of pollution reduction?
2$
ABC

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