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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Consider the market for steel. Suppose that a steel manufacturing plant dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the plant. Producing an additional ton of steel imposes a constant external cost of $165 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for steel. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $165 per ton. 1100 990 Social Cost 880 770 Supply (Private Cost) 660 550 440 330 220 Demand 110 (Private Value) 1 2 4 7 QUANTITY (Tons of steel) PRICE (Dollars per ton of steel)
A T, C Pollution The above graph illustrates the marginal pollution cost per ton of goods that a firm produces. Assume the firm currently has no regulation and will produce at the point Qmax. Suppose a pollution tax per ton is placed on the firm (T1). What area represents the tax paid by the firm? C only A+B A+B+C
Q8
This is an end-of-chapter problem that I'm struggling with! thanks!
There are 2 firms: Firm X and Firm Y. Firm X has the following cost to pollution reduction: MCx = 10 + 2Qx Firm Y has the following cost to pollution reduction: MCy = 4 + 4Qy Both firms currently produce 100 units of pollution, for a combined production of 200 units. The government has decided to reduce total pollution to 56 units. To do this, the government introduces 56 tradable permits, giving 28 to each firm. What is the equilibrium price of each permit?
Air pollution creates a negative externality—a cost suffered by a third party as a result of an economic transaction. A standard solution to a negative externality is a Pigouvian tax, a tax that raises the marginal private cost of pollution emissions to the level of the marginal social cost. The socially optimal quantity of pollution emissions is then determined by the intersection of the marginal private benefit, or demand, curve and the marginal social cost curve. The article notes that "putting a dollar value on the benefits of cleaner air has been difficult." Assuming this problem has been resolved, in the accompanying diagram, move the endpoints of line Smarginal social cost to show the marginal social cost curve. Then move the line labeled "Tax" to show the amount of the tax needed to limit emissions to the socially optimal level.
5B. Two textile mills, located across a river from each other, are polluting the river. The marginal costs of pollution reduction for each firm are MCE₁ = 4E₁ + 4 MCE2 = 4/3E2 + 4/3, where E is the reduction in pollution from unregulated levels. The associated marginal social benefit is estimated to be MSB = 10-E, where E = E₁ + E₂. a. What is the socially optimal level of water-pollution reduction? c. If instead the government imposed a standard requiring each firm to equally reduce the level of pollution to achieve the socially optimal solution in part (i), what are the costs for each firm?
Chapter 10 The first government employee suggests reducing pollution through regulation. To meet the pollution goal, the government requires each firm reduce its pollution by 2 units. Complete the following table with the total cost to each firm of reducing its pollution by 2 units. Firm Total Cost of Eliminating Two Units of Pollution (Dollars) Firm A Firm B Firm C ☐☐ Method 2: Tradable Permits Meanwhile, the other employee proposes using a different strategy to achieve the government's goal of reducing pollution in the area from 1 6 units. This employee suggests that the government issue two pollution permits to each firm. For each permit a firm has in its possession, i 1 unit of pollution. Firms are free to trade pollution permits with one another (that is, buy and sell them) as long as both firms can agree on For example, if firm A agrees to sell a permit to firm B at an agreed-upon price, then firm B would end up with three permits and would nee reduce its pollution by only 1 unit…
Q. 1
Air horns impose many external costs on society: the risk of being deafened, the annoyance of being awakened in the middle of the night, and so on. Therefore, the market equilibrium quantity of air horns is not equal to the socially optimal quantity. The following graph shows the demand for air horns (their private value), the supply of air horns (the private cost of producing them), and the social cost of air horns, including both the private cost and external costs. Use the black point (plus symbol) to indicate the market equilibrium quantity. Next, use the purple point (diamond symbol) to indicate the socially optimal quantity.
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