PRINCIPLES OF ECONOMICS
14th Edition
ISBN: 2810015433483
Author: OpenStax
Publisher: OpenStax
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Chapter 33, Problem 8RQ
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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 33 Solutions
PRINCIPLES OF ECONOMICS
Ch. 33 - True or False: The source of comparative advantage...Ch. 33 - Brazil can produce 100 pounds of beef or 10 autos....Ch. 33 - In France it takes one worker to produce one...Ch. 33 - In Germany it takes three workers to make one...Ch. 33 - How can there be any economic gains for a country...Ch. 33 - Table 33.15 shows how the average costs of...Ch. 33 - If the removal of trade banters is so beneficial...Ch. 33 - What is absolute advantage? What is comparative...Ch. 33 - Under what conditions does comparative advantage...Ch. 33 - What factors does Paul Krugman identity that...
Ch. 33 - Is it possible to have a comparative advantage in...Ch. 33 - How does comparative advantage lead to gains from...Ch. 33 - What is intra-industry trade?Ch. 33 - What are the two main sources of economic gains...Ch. 33 - What is splitting up the value chain?Ch. 33 - Are the gains from international trade more likely...Ch. 33 - Are differences in geography behind the...Ch. 33 - Why does the United States not have an absolute...Ch. 33 - Look at Exercise 33.2. Compute the opportunity...Ch. 33 - You just overheard your friend say the following:...Ch. 33 - Look at Table 33.9. Is there a range of trades for...Ch. 33 - You just got a job in Washington, D.C. You move...Ch. 33 - Does intra-industry trade contradict the theory of...Ch. 33 - Do consumers benefit from intra-industry trade?Ch. 33 - Why might intra-industry trade seem surprising...Ch. 33 - In World Trade Organization meetings, what do you...Ch. 33 - Why might a low-income country put up barriers to...Ch. 33 - Can a nations comparative advantage change over...Ch. 33 - France and Tunisia both have Mediterranean...Ch. 33 - In Japan, one worker can make 5 tons of rubber or...Ch. 33 - Review the numbers for Canada and Venezuela from...Ch. 33 - In Exercise 33.31, is there an ask where...Ch. 33 - From earlier chapters you will recall that...Ch. 33 - Consider two countries: South Korea and Taiwan....Ch. 33 - If trade increases world GDP by 1 per year, what...
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