a) Consumers Consider N consumers. Consumer i has the utility function: Ui = xi - k*(E2/2) Where x denotes spending on private goods and E the total level of polluting emissions. (i) Find the marginal rate of substitution in consumption between emissions and the good private to the individual i.
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a) Consumers Consider N consumers. Consumer i has the utility function:
Ui = xi - k*(E2/2)
Where x denotes spending on private goods and E the total level of polluting emissions.
(i) Find the marginal rate of substitution in consumption between emissions and the good private to the individual i.
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- Consider a competitive market in which the MPB = 180 – 2q and the MSC = q. In this market, however, there is a positive consumption externality of $60 per unit consumed. What is the efficient level of output in this market? A. 60 B. 80 C. 70 D. 90 E. 100Suppose the marginal benefit (MB) and marginal cost (MC) curves for emitting particulate matter are given by the following schedules, where E is the quantity of emissions per period. The marginal benefits and costs are measured at the quantities of emissions shown. E/Period MB ($ MC ($) 0 230 0 200 190 10 400 150 30 600 110 50 800 70 70 1000 30 90 Use the information above to calculate the tax rate that would achieve the efficient rate of emissions. Efficient Tax Rate =$__ per unit of pollutionConsider 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 ______________Attached is the marginal abatement costs of three firms, related to the quantity of emissions. Each firm is now emitting 10 tons per week, so total emissions are 30 tons per week. Suppose we wish to reduce emissions by 50 percent, to 15 tons per week. Compare the total cost of doing this: (a) with an equi-proportionate decrease in emissions (b) with a decrease that meets the equi-marginal principle.The main disadvantage of an emissions tax is that .... differences among firms are not incorporated into the policy firms lack the flexibility to pursue different technologies firms cannot behave in an economically-efficient manner. firms do not have the incentive to reduce pollution. the total pollution reduction from an emissions tax cannot be known for sure.
- Update the graph below to illustrate the efficient level of emissions if new research demonstrates that emissions are more harmful than previously estimated. Clearly show which curve(s) change and denote the new efficient level of emissions as E4.Consider 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 you are asked to evaluate the incremental benefits an environmental policy using the travel cost method. The user charge for an environmental amenity is $20 per visitor. The pre and post recreational demand functions, respectively, are given as follows P = 72 − 0.04V0 P = 90 − 0.04V1.
- Taylor rehearses her singing at the dorm of her friend, Carly. Rehearsing at the dorm saves her money because it costs Php 500 per hour to rent a rehearsal space at the UP College of Music. Unfortunately, singing in the dorm disturbs Carly's neighbor, Ariana, causing her to lose sleep. The value of an hour of Ariana's lost sleep is Php 600. A. Determine whether it is socially optimal for Taylor to rehearse in the dorm. B. If UP policy states that it is illegal for Taylor to rehearse in the dorm, will Taylor end up practicing there? What can Ariana do to try to stop Taylor? C. Suppose UP policy says it is legal for Taylor to rehearse in the dorm. i. How much is Ariana willing to pay Taylor to get her to stop?Following are the marginal abatement costs of three firms . Suppose each firm is currently emitting 10 tons / week , so the total emissions are 30 tons / week . Suppose we wish to reduce total emissions by 50 % , to 15 tons per week . The following table provides marginal abatement costs for each firm . a ) What is the total cost if each firm cuts total emission by 50 % from their current levels . b ) What is the total cost if the total emissions decrease by 50 % ( to 15 tons per week ) that meets the equi - marginal principle . c ) From the society's point , which method of reducing ( a or b above ) emissions is better ? Provide a reason .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'' ?…
