EBK MINDTAP ECONOMICS FOR BOYES/MELVIN'
10th Edition
ISBN: 9781305387614
Author: MELVIN
Publisher: VST
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Question
Chapter 12, Problem 12E
To determine
Calculate the value of M2 form the given table.
| Money Component | Amount |
| Traveller's check | |
| Currency | |
| Small-denomination time deposits | |
| Savings deposits | |
| | |
| Other checkable deposit | |
| Real money market mutual funds | |
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Section 1
Answer all questions. Show all your workings.
(a) Suppose there are two firms 1 and 2, whose abatement costs
are given by c₁(e₁) and c₂ (e₂), where e denotes emissions and
subscripts denote the firm.
We assume that c{(e;) 0 for i = 1,2 and for any
level of emission e we have c₁'(e) # c₂'(e).
Furthermore, assume the two firms make different contributions
towards pollution concentration in a nearby river captured by the
transfer coefficients ε₁ and 2 such that for any level of emission
e we have 2(e) +2 The regulator does not know the resulting
C₁'(e) Τι
environmental damages. Using an analytical approach explain
carefully how the regulator may limit the concentration of
pollution using (i) a Pigouvian tax scheme and (ii) uniform
emissions standards. Discuss the cost-effectiveness of both
approaches to control pollution.
[200 marks]
(b) "Whether the regulator sells or gives away tradeable emission
permits free of charge, the quantities of emissions produced by
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Chapter 12 Solutions
EBK MINDTAP ECONOMICS FOR BOYES/MELVIN'
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