The zero emission in automobiles.

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Chapter 14, Problem 10SQ

To determine

The zero emission in automobiles.

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MAC = 50 - 5E. The government offers a $30 per-unit subsidy for abatement. In principle, the firm could ignore the subsidy and continue to emit as many emissions as it was in the absence of government intervention, but there is money to be made from cutting back its emissions. Compared to ignoring the subsidy, how much money could a cost-minimizing firm save or make by cutting back its emissions?

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 $1 to $4, the benefits of adopting the new technologies increase by $. Select one: a. $7.50. O b. $12. C. $3. O d. $4.5.

Please explain each solution step by step.Consider an economy with 2 plants, A and B, whose operations produce emissions. The graphs show the marginal benefits (MB) to each plant from its emissions on the y-axis (in Euros) and the quantity of emissions in tons on the x-axis. The graph on the left represents the case when the government imposes a limit on emissions. The graph on the right represents the case when the government imposes a tax on emissions.a) let’s say the government limits the emissions of each plant at 4 tons. The marginal benefit of 4 tons of emissions to plant A is 2 euros. Referring to the graph on left, what is the welfare loss to plant A from the limit imposed by the government? (euros)b) now let’s say the government sets a unit tax on emissions of 6 euros. Under this tax, plant B will produce 6 tons of emissions and plant A will produce 2 tons of emissions. Referring to the graph on the right, what is the total net welfare from the imposition of the tax?…