MACROECONOMICS
14th Edition
ISBN: 9781337794985
Author: Baumol
Publisher: CENGAGE L
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Chapter 12, Problem 2TY
To determine
To describe:To impact on the money supply if the
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"Whether the regulator sells or gives away tradeable emission
permits free of charge, the quantities of emissions produced by
firms are the same."
Assume that there are n identical profit-maximising firms where
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0 and e denotes emissions. Individual emissions summed over
all firms gives E which generates environmental damages
D(E). Show that the regulator achieves the optimal level of total
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Case (i) the firm purchases all permits;
Case (ii) the firm receives all permits free; and
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Case (iii) the firm purchases a portion of its permits and receives
the remainder free of charge.
compare and/or contrast the two plays we've been reading, Antigone and A Doll's House.
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