EXPLORING ECON.-W/ACCESS (LL) >CUSTOM<
7th Edition
ISBN: 9781305757448
Author: Sexton
Publisher: CENGAGE C
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Question
Chapter 4, Problem 19P
To determine
(a)
Effect on the supply of coffee worldwide if the freezing temperature wipes out half of the Brazil's coffee crop
To determine
(b)
Effect on supply of coffee around worldwide if the wages of coffee workers in Latin America rise as unionization efforts succeed.
To determine
(c)
Effect on supply of coffer around the world if Indonesia offers big subsides to its coffee producers.
To determine
(d)
Effect on supply of coffee around the world if a genetic engineering produces a coffee bean that grows faster and needs less care
To determine
(e)
Effect on supply of coffee around the world if coffee suppliers expect the prices to be hiher in the future.
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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 4 Solutions
EXPLORING ECON.-W/ACCESS (LL) >CUSTOM<
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