2. Suppose MAC = 40 - 2E and MD = 2E. Draw a graph to show and calculate the following: a) What are the efficient level of emissions e*, total damages TD, total abatement cost TAC, and total social costs related to emissions? b) If there is no pollution control, what is the total social costs related to emissions. How much of costs can be saved by moving to e*? c) What are the total social costs related to zero emissions? How much of costs can be saved by moving to e*? d) If the actual emission level is 15, what are the total damages, total abatement cost, and total social costs related to emissions? Compared with the efficient level, what is the deadweight loss (in terms of too high total social cost)?

2. Suppose MAC = 40 - 2E and MD = 2E. Draw a graph to show and calculate the following: a) What are the efficient level of emissions e, total damages TD, total abatement cost TAC, and total social costs related to emissions? b) If there is no pollution control, what is the total social costs related to emissions. How much of costs can be saved by moving to e? c) What are the total social costs related to zero emissions? How much of costs can be saved by moving to e*? d) If the actual emission level is 15, what are the total damages, total abatement cost, and total social costs related to emissions? Compared with the efficient level, what is the deadweight loss (in terms of too high total social cost)?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Public Goods And Common Resources

Section: Chapter Questions

Problem 10PA

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