Macroeconomics for Today
10th Edition
ISBN: 9780357161494
Author: Irvin B. Tucker
Publisher: Cengage Learning US
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Question
Chapter 12, Problem 6SQ
To determine
The regressive
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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
firms are the…
Chapter 12 Solutions
Macroeconomics for Today
Ch. 12.4 - Prob. 1YTECh. 12 - Prob. 1SQPCh. 12 - Prob. 2SQPCh. 12 - Prob. 3SQPCh. 12 - Prob. 4SQPCh. 12 - Prob. 5SQPCh. 12 - Prob. 6SQPCh. 12 - Prob. 7SQPCh. 12 - Prob. 8SQPCh. 12 - Prob. 9SQP
Ch. 12 - Prob. 10SQPCh. 12 - Prob. 11SQPCh. 12 - Prob. 1SQCh. 12 - Prob. 2SQCh. 12 - Prob. 3SQCh. 12 - Prob. 4SQCh. 12 - Prob. 5SQCh. 12 - Prob. 6SQCh. 12 - Prob. 7SQCh. 12 - Prob. 8SQCh. 12 - Prob. 9SQCh. 12 - Prob. 10SQCh. 12 - Prob. 11SQCh. 12 - Prob. 12SQCh. 12 - Prob. 13SQCh. 12 - Prob. 14SQCh. 12 - Prob. 15SQCh. 12 - Prob. 16SQCh. 12 - Prob. 17SQCh. 12 - Prob. 18SQCh. 12 - Prob. 19SQCh. 12 - Prob. 20SQ
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