. What would the polluting industry's total abatement costs equal if it faced an emissions tax rate equal to 20 dollars per unit emitted? A. 60 B. 20 C. 10 D. 0
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Suppose the aggregate MAC function is 100 - 20W and aggregate MD = 5W for a polluting industry.
1. Suppose an emissions standard is being considered to achieve the socially optimal emissions level. What would be the total costs that the polluting industry avoids if the regulator decided not to regulate the firm and leave the market as is?
A. 0 B. 150 C. 50 D. 10
2. What would the polluting industry's total abatement costs equal if it faced an emissions tax rate equal to 20 dollars per unit emitted?
A. 60 B. 20 C. 10 D. 0
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- Suppose the aggregate MAC function is 100 - 20W and aggregate MD = 5W for a polluting industry. 1. Here the slopes of MAC and MD are equal in absolute value. Suppose instead that the slope of the MD function is greater than the slope of the MAC function. What would then be the preferred policy if there was asymmetric information about MAC? A. Emissions tax B. Emissions standard C. No regulation D. None of the above 2. Suppose an emissions standard is being considered to achieve the socially optimal emissions level. What would be the total costs that the polluting industry avoids if the regulator decided not to regulate the firm and leave the market as is? A. 0 B. 150 C. 50 D. 10 3. What are total damages that would be avoided if in fact the regulator used an emissions standard to achieve the socially optimal level of emissions? A. 62.5 B. 40 C. 12.5 D. None of the above 4. What are net benefits at the optimal level of emissions using the "abatement cost perspective'' ?…Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 8 - E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 4 - 0.5E. Moreover, assume that the adoption costs for the new technologies are $3. If the government raises the tax on emissions from $1 to $3, then the firm's total costs increase by $____. (Hint: total costs are different from total compliance costs. Total compliance costs are the sum of TAC and tax payment, while total costs are the sum of total compliance costs and adoption costs (remember that adoption costs are only incurred if the firm actually decides to adopt the new technology).) Please round your final answer to two decimal places if necessary. THE ANSWER IS NOT 9Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 16 - 2E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 8 - E. If the government raises the emissions tax from $2 to $3, then the benefits of adopting the new technologies increase by $____. (Hint: recall that the benefits from adopting new technologies are simply the difference in total compliance costs.) Please round your final answer to two decimal places if necessary. Answer is NOT 2. All information is provided
- Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 16 - 2E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 8 - E. If the government raises the emissions tax from $2 to $3, then the benefits of adopting the new technologies increase by $____. (Hint: recall that the benefits from adopting new technologies are simply the difference in total compliance costs.) Please round your final answer to two decimal places if necessary. Answer is not 2Consider two sources of a non-uniformly mixed pollutant: one source with a high and the other one with low transfer coefficient. Which statement(s) is/are true? Mark all that applies. Group of answer choices For the source with the higher transfer coefficient. a higher ambient charge per unit of emissions is justified. For the source with the lower transfer coefficient a higher ambient charge per unit of emissions is justified. For the source with the higher emissions level a higher ambient charge per unit of emissions is justified. The source with the higher transfer coefficient is required to purchase more ambient allowance when it emits a unit of emission. The source with the lower transfer coefficient is required to purchase more ambient allowance when it emits a unit of emission. The source with the higher emission level is required to purchase more ambient allowance when it emits a unit of emission than the source with the lower overall emissions levelSuppose a power generating plant emits particulates that damage crops and affect human health. The relationship between emissions and environmental damage is represented by the marginal damage function, MD=9e where e represents tons of emissions per month. The cost to the firm (and society) of eliminating emissions is represented the marginal abatement cost function, MAC=108.5 - 6.5e Both MD and MAC are dollar costs per month. If the power generating firm were allowed to ignore the social cost of its emissions, what would be the firm’s monthly emission level? Calculate the socially efficient level of pollution. If the emissions calculated in part B is a level found to shorten some people’s lives, could it still be considered socially efficient? Suppose the EPA set an emission standard at the socially efficient level calculated in part B. Calculate the cost to the firm of achieving this standard. Suppose that instead of a standard, the EPA charged an emissions tax. The tax is set at…
- Appalachian Coal Mining believes that it can increase labor productivity and, therefore, net revenue by reducing air pollution in its mines. It estimates that the marginal cost function for reducing pollution by installing additional capital equipment is MC = 40P where P represents a reduction of one unit of pollution in the mines. It also feels that for every unit of pollution reduction, the marginal increase in revenue (MR) is MR = 1,000 - 10P How much pollution reduction should Appalachian Coal Mining undertake? Please provide the correct answer. Thank you!Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 16 - 2E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 8 - E. If the government raises the emissions tax from $2 to $3, then the benefits of adopting the new technologies increase by $____. (Hint: recall that the benefits from adopting new technologies are simply the difference in total compliance costs.) THE ANSWER IS NOT 2 or 1.75 Might be 1.25 or 4.50Consider an industry with two firms that emit a uniformly mixed air pollutant (e.g., carbon dioxide). The marginal abatement cost functions for Firm 1 and Firm 2 are: MAC1 = 100-e1 MAC2 = 100-4e2 Aggregate emissions for the industry are denoted as E = e1 + e2. [1] In an unregulated environment how many units of emissions does each firm emit? Firm 1’s unregulated level of emissions: Firm 2’s unregulated level of emissions: Total unregulated level of emissions: Suppose a regulator has a goal of reducing the total level of emissions from the amount from the amount you answered in [1] to 25 units. The regulator would like to achieve the goal of 25 units of total emissions in a cost-effective way. To do so it issues 25 permits, 10 are given to Firm 1 and 15 are given to Firm 2. A firm can only emit a unit of pollution if they have a permit for that unit, otherwise they must abate. After the permits are allocated, firms are allowed to buy or sell…
- Consider an industry with two firms that emit a uniformly mixed air pollutant (e.g., carbon dioxide). The marginal abatement cost functions for Firm 1 and Firm 2 are: MAC1 = 100 - e1 MAC2 = 100 - 4e2 Aggregate emissions for the industry are denoted as E = e1 + e2. [1] In an unregulated environment how many units of emissions does each firm emit? Firm 1’s unregulated level of emissions ____________ Firm 2’s unregulated level of emissions ____________ Total unregulated level of emissions ______________. Appalachian Coal Mining believes that it can increase labor productivity and, therefore, net revenue by reducing air pollution in its mines. It estimates that the marginal cost function for reducing pollution by installing additional capital equipment is MC=40P Where P represents a reduction of one unit of pollution in the mines. It also feels that for every unit of pollution reduction the marginal increase in revenue (MR) is MR=1000-10P How much pollution reduction should Appalachian Coal Mining undertake?Appalachian Coal Mining believes that it can increase labor productivity and, therefore, net revenue by reducing air pollution in its mines. It estimates that the marginal cost function for reducing pollution by installing additional capital equipment is MC = 40P where P represents a reduction of one unit of pollution in the mines. It also feels that for every unit of pollution reduction, the marginal increase in revenue (MR) is MR = 1,000 - 10P How much pollution reduction should Appalachian Coal Mining undertake?