An electric utility may choose to invest in a new technology for controlling emissions rather than engage in permit trades. If MAC2 represents the new technology, how much will the polluter save at E1 compared to staying on its initial MAC,?
Q: Classify the following pollution-control policies as command-and-control or market incentive based.…
A: Meaning of Command Market or Planned Market: Under the commanding market, most of the portion is…
Q: Suppose the aggregate MAC function is 100 - 20W and aggregate MD = 5W for a polluting industry.…
A: MAC = 100 - 20W MD = 5W
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Q: The main advantage of tradable pollution permits over Pigovian taxes is that...
A: Pigovian tax is the tax paid by the private individual on an activity that generate side effects to…
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Q: Submit AL Which statement is TRUE with regards to the use of tradable permits for controlling carbon…
A: In economics, tradable permits are the government provided rights to a firm to generate a specfiic…
Q: No SPAM!! ONLY answer full STEP by STEP solution BY HAND . Why option C is true? Costs, Benefits €…
A: Socially optimum equilibrium is where marginal net private benefit is equal to marginal external…
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A: The government has to look after all the possible problems and issues which are a cause of the…
Q: Discuss the concept of externalities and discuss the advantages and disadvantages of tradeable…
A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 12 - E.…
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A: Lindahl price is equal to the marginal benefit received by each individual.
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Q: Imagine that in the state of California a chemical producing firms has a marketable permit that…
A: A "carbon credit" permits the owner to emit a specific amount of carbon dioxide or other greenhouse…
Q: The figure above shows a national marketable permit system for carbon dioxide. Which of the…
A: The permit price is determined by the supply of permits and demand for permits. The equilibrium…
Q: Combating emissions that lead to global warming differs from other types of pollution abatement…
A: The global warming is a worldwide concern. These occurs due to various emissions that leads to…
Q: The equation for the marginal cost of reductions is P=1+R*2 The equation for the marginal benefit of…
A: Marginal cost of reductions: PC =1+2R Marginal benefit of reductions: PB =33-2R where; R = Rate of…
Q: The marginal (external) damage cost from air pollutant emission is MD = 20 + Q where Q is the…
A: Optimum level of pollution is calculated when MC = MD thus, 200- 5Q = 20+Q 180 = 6Q Q = 180/6 = 30…
Q: Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E):…
A: The socially efficient level of aggregate emissions is achieved when marginal abatement costs and…
Q: Suppose there are 2 petrochemical companies that cause water pollution in the surrounding…
A: Marginal cost of company 1 is, MC1=150.e1 and marginal cost of company 2 is, MC2 = 50e2 where, e1…
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Q: quantity
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A: ANS
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A: Hi! Thank you for the question but as per the guidelines, we answer up to three subparts at one…
Q: The social cost of carbon is measured as the welfare gain associated with the total tons of carbon…
A: Social cost: It means the total cost to society.
Q: Two polluters currently emit 10-tons of pollution each for a total of 20 tons. The two firms have…
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Q: Refer to the diagram. With MB1 and MC1, society's optimal amount of pollution abatement is Multiple…
A: At Q1 is the point where the marginal benefit equals the private marginal cost while the social…
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A: a.The externalities caused by the cheese factory are adverse and are negative externalities. Thus,…
Q: What are the estimated abatement cost curves? What would the pollution standard be if they achieved…
A: The cost of reducing environmental negatives such as pollution is known as abatement cost.
Q: If the power generating firm were allowed to ignore the social cost of its emissions, what would be…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Which of the following statements about pollution taxes, cap and trade, or command-and-control…
A: Pollution Tax is the type of taxation that charges polluters for the damages that their actions have…
Q: Consider the market for trees in a public park. These trees are a public good that give benefits to…
A: a. Without the involvement of the Government, each group will set their marginal willingness to pay…
Q: Consider regions A and B. In region A, the marginal benefit associated with pollution cleanup is MB…
A: We have to put marginal benefit equal to the marginal cost to find out the optimal level of…
Q: Externalities: Suppose the daily inverse demand curve for gasoline in Portland is given by P = $100…
A: Externality refers to the external cost or benefits that are imposed on someone without their…
Q: Compared with a standard, both tradable discharge permits and emission taxes tend to be preferred by…
A: The government has to look after all the possible problems and issues which are a cause of the…
Q: Suppose there are only two polluting firms, called A and B, with the following marginal abatement…
A: (A) On Assuming that each TEP permits its holder to emit 1 ton, in a perfectly competitive market…
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A: Externalities is the negatives spillover effect of an economic activities of person which have…
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- Would environmentalists favor command-and-control policies as a way to reduce pollution? Why or why not?A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals to clear some of Sherwoods forest and grow com, but obtaining this additional economic output will have an environmental cost from reducing the number of trees. Table 12.11 shows possible combinations of economic output and environmental protection. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the number of trees, and the quantity of economic output, measured in corn, on the vertical axis. Which choices display productive efficiency? How can you tell? Which choices show allocative efficiency? How can you tell? In the choice between T and R, decide which one is better. Why? In the choice between T and S, can you say which one is better, and why? If you had to guess, which choice would you think is more likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice Q or S? Why?From an economic perspective, is it sound policy to pursue a goal of zero pollution? Why or why not?
- Consider two approaches to reducing emissions of CO2 into the environment from manufacturing industries in the United States. In the first approach, the U.S. government makes it a policy to use only predetermined technologies. In the second approach, the U.S. government determines which technologies are cleaner and subsidizes their use. Of the two approaches, which is the command-and-control policy?Is zero pollution an optimal goal? Way or why not?Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once we accounted for both the private and additional external costs, the market price increased by only 50. If the external costs were 100 why did the price only increase by 50 when we accounted for all costs?
- In the Land of Purity, there is only one form of pollution, called gunk. Table 12.14 shows possible combinations of economic output and reduction of gunk, depending on what kinds of environmental regulations you choose. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the percentage reduction of gunk, and with the quantity of economic output on the vertical axis. Which choices display productive efficiency? How can you tell? Which choices show allocative efficiency? How can you tell? In the choice between K and L, can you say which one is better and why? In the choice between K. and N, can you say which one is better, and why? If you had to guess, which choice would you think is move likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice L or M? Why?Consider the case of global environmental problems that spill across international borders as a prisoners dilemma of the sort studied in Monopolistic Competition and Oligopoly. Say that there are two countries, A and B. Each country can cheese whether to protect the environment, at a cost of 10, or not to protect it, at a cost of zero. If one country decides to protect the environment, there is a benefit of 16, but the benefit is divided equally between the two countries. If both countries decide to protect the environment, there is a benefit of 32, which is divided equally between the two centuries. In Table 12.10, fill in the costs, benefits, and total payoffs to the countries of the following decisions. Explain why, without some international agreement, they are likely to end up with neither country acting to protect the environment.cap-and-trade and windfall profitsA city called Seoul is suffering from high concentrations of mercury in the air, caused by burningcoal in power plants. There are two of these plants close to the city. The city’s mayor wants touse cap-and-trade to reduce emissions to a reportedly “safe” level of 60 tons. The two firms havethe following marginal benefits of emissions: MB1 = 100 – 2e1, MB2 = 25 – 0.5e2.a. How much mercury will each firm emit? What allowance price will prevail in themarket?Firm 2 hires a smart lobbyist who convinces the government that its profits are relatively low andthat it therefore deserves a generous allowance allocation. The government agrees and allocatesa1 = 20 allowances to firm 1 (for free) and a2 = 40 allowances to firm 2 (for free).b. What are the firms’ profits? Do any of the firms earn windfall profits? [Hint: compareprofits with and without regulation.] Windfall profits have been sharply criticized by consumer advocacy groups and politicians.c. What can…
- qs abiv 30 ovo pilo 5. Oil spills from oceangoing tankers are rare but bring huge damages to coastlines when they occur within 200 miles of shore. Unfortunately, most tanker spills do occur on or near coasts. Rank the following alternatives according to how efficient they are in i jud, responding to the threat of oil spills. Explain your ranking. a. Each nation with an endangered coastline should impose a tax on all imported oil, a tax that raises enough revenue to compensate for any oil-spill damages. b. Each coastal nation should impose a tax on all domestically purchased oil, a tax that raises enough revenue to compensate for any oil-spill damages. c. Oil-carrying companies should be legally liable for all damages, in the courts of the countries whose national waters are polluted by the spills. d. Each coastal nation should intercept all oil tankers in national waters and charge them a fee that will cover the estimated costs of future oil spills.Figure 4 shows that for any given demand curve forthe right to pollute, the government can achieve thesame outcome either by setting a price with a correctivetax or by setting a quantity with pollutionpermits. Suppose there is a sharp improvement in thetechnology for controlling pollution.a. Using graphs similar to those in Figure 4, illustratethe effect of this development on the demand forpollution rights.b. What is the effect on the price and quantity of pollutionunder each regulatory system? Explain.Assume that the market for tradable emissions permits by power plants has been operating efficiently for severalyears. An engineering firmthen invents a lower cost device for pollution abatement. What happens to theequilibrium market price of a tradable permit, and why? Draw a supply and demand diagram, with a fixedsupply of pollution permits, along with your answer.Has the socially optimal amount of pollution increasedor decreased? Explain