Exhibit 30-3Costs of Eliminating:Firm AFirm BFirm C1st ton of pollution$ 30$ 50$ 602nd ton of pollution$ 70$90S 7003rd ton of pollution$125$150$ 9004th ton of pollution$200$250$1,300Refer to Exhibit 30-3. Suppose that Firms A, B, and C are the only polluters in the state andthat each emits 4 tons of pollution into the atmosphere. To cut the level of pollution in halfthe govemment issues two transferable pollution permits to each fim (a cap and tradepoliey). What is the total cost savings to society of decreasing pollution to half its presentlevel if firm C buys one pollution permit from fim A and one pollution permit from firm Bcompared to if there were a government mandate for each firm to cut pollution by one-half?$1,300$1,380$515O $1,025O $965

Given are the cost of eliminating 4 tons of pollution for each firm A, B and C. There are two cases…

Exhibit 30-3 Costs of Eliminating: Firm A Firm B Firm C lat ton of pollution $ 30 $ 50 $ 600 2nd ton of pollution $ 70 $ 90 $ 700 3rd ton of pollution $125 $150 $ 900 4th ton of pollution $200 $250 $1,300 Refer to Exhibit 30-3. Suppose that Firma A, B, and C are the only polluters in the state and that each emits 4 tona of pollution into the atmosphere. To cut the level of pollution in half the govermment issues two transferable pollution permits to each firm (a cap and trade policy). What is the total cost savings to society of decreasing pollution to half its present level if firm C buys one pollution permit from fim A and one pollution permit from firm B compared to if there were a govermment mandate for each firm to cut pollution by one-half? $1,300 O $1,380 $515 O $1,025 $965

Exhibit 30-3 Costs of Eliminating: Firm A Firm B Firm C lat ton of pollution $ 30 $ 50 $ 600 2nd ton of pollution $ 70 $ 90 $ 700 3rd ton of pollution $125 $150 $ 900 4th ton of pollution $200 $250 $1,300 Refer to Exhibit 30-3. Suppose that Firma A, B, and C are the only polluters in the state and that each emits 4 tona of pollution into the atmosphere. To cut the level of pollution in half the govermment issues two transferable pollution permits to each firm (a cap and trade policy). What is the total cost savings to society of decreasing pollution to half its present level if firm C buys one pollution permit from fim A and one pollution permit from firm B compared to if there were a govermment mandate for each firm to cut pollution by one-half? $1,300 O $1,380 $515 O $1,025 $965

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 10PA

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Similar questions

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