Two firms can reduce emissions at the marginal costs: MC1 = $12Q1 and MC2 = $4Q2, where Q1, and Q2 are the amount of emissions reduced by the first and second firms. Assume that with no control at all, each firm would be emitting 40 units of emissions (for aggregate emissions of 80 tons). a. Illustrate MC1 and MC2 on the graph. b. Find total costs for two firms with the tax. Hint. [Compute control cost with the tax that each firm will have to pay for the reduction of emission in b. and tax payments for the remaining emission.

The following table shows the total costs for each of four firms (A,B,C, and D) to eliminate units of pollution from their production processes. For example, for Firm A to eliminate one unit of pollution, it would cost $40, and for Firm A to eliminate two units it would cost a total of $105. If the government charged a tax of $74 per unit of pollution, how many units of pollution would the firms eliminate altogether? Number of units Firm A Firm B Firm C Firm D eliminated One unit 40 45 50 48 Two units 105 100 80 108 Three units 180 172 165 178 Four units 285 244 250 285 O 16 O 11 O 14 0 9 O 5

Suppose a municipality votes to reduce the combined pollution introduced by three local companies. Presently, each firm cre the area, for a total of 12 pollution units. The government can reduce total pollution in the area to 6 units by choosing between the following two methods: Methods to Reduce Pollution 1. The government imposes pollution standards using regulation. 2. The government issues tradable pollution permits. The costs faced by each firm are different, so it is more difficult for some firms to reduce pollution than others. The following table shows the cost faced by each firm to eliminate each unit of pollution. Assume that the cost of eliminating all 4 units of pollution (that is, reducing pollution to zero) is prohibitively expensive for all three firms. Firm Firm A Firm B Firm C First Unit of Pollution (Dollars) 55 650 90 Method 1: Regulation Cost of Eliminating the... Second Unit of Pollution (Dollars) 70 800 125 Third Unit of Pollution (Dollars) 110 1,500 180 Next,…

The following table shows the current level of toxic waste dumped by two firms and the marginal cost of cleaning up additional 10 lbs increments of waste. Suppose the government has imposed a pollution tax of $7 per 10 lbs of waste. Calculate the reduction in total pollution and the total cost to the firms of doing so? Current waste (lbs) Cost of reducing by 1st 10 lbs Cost of reducing by 2nd 10 lbs Cost of reducing by 3rd 10 lbs Cost of reducing by 4th 10 lbs Cost of reducing by 5th 10 lbs Firm A 60 $5 $10 $15 $20 $25 Firm B Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. 80 $2 $4 $6 $8 $10

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The following table shows the marginal costs for each of the four firms (A, B, C, and D) to eliminate units of pollution from their production processes. For example, for Firm A to eliminate one unit of pollution, it would cost $ 54, and for Firm A to eliminate a second unit of pollution it would cost an additional$67. Refer to Table 10-5. Suppose the government wants to reduce pollution from 16 units to 8 units and auctions off 8 pollution permits to achieve this goal. Which of the following is a likely auction price for the permits? a.$69b.$97c.$81d. 583

The town has a kayak rental and visitors use the lake for recreation. The town also has a chemical lab that dumps industrial waste into the lake. This pollutes the lake and makes it a less desirable vacation destination. That is, the chemical lab's waste decreases the kayak rental's economic profit.    Suppose that the chemical lab could use a different production method that involves recycling water. This would reduce the pollution in the lake to levels safe for recreation, and the kayak rental would no longer be affected. If the chemical lab uses the recycling method, then the chemical lab's economic profit is $900 per week, and the kayak rental's economic profit is $2,600 per week. If the chemical lab does not use the recycling method, then the chemical lab's economic profit is $1,600 per week, and the kayak rental's economic profit is $1,500 per week. These figures are summarized in the following table. Complete the following table by computing the total profit (the chemical lab's…

Two coal-burning electric power plants are emitting mercury which impairs cognitive development in children. Plant A's marginal abatement cost is MCA= 1.2q and plant B's marginal abatement cost is MCB = 0.3q. Each firm initially emits 50 units and the EPA would like to reduce total emissions to 40.   If the EPA follows a command-and-control policy and tells each firm to abate by the same amount, what will be the total costs?     If firms could trade permits, what would happen to total costs? Why?

Imagine a firm’s marginal abatement cost function with existing technologies is: MAC = 12 – E. If the firm adopts new pollution abatement technologies, its marginal abatement cost function will be: MAC = 6 – 0.5E. The adoption costs for the new technology are $6. If the government raises the tax on emissions from $2 to $4, the firm's total costs increase by $_____. HINT: Total costs include tax payments, total abatement costs, and (if relevant) adoption costs for the new technology. Select one: a. $12. b. $8. c. $10. d. $16.