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- Is zero pollution possible under a marketable permits system? Why or why not?Suppose you want to put a dollar value on the external costs of carbon emissions from a power plant. What information or data would you obtain to measure the external [not social] cost?Assume that the marginal private costs of a film producing fuel-efficient can; is greater than the marginal social costs. Assume that the marginal private benefits of a firm producing fuel efficient cars are the same as the marginal social benefits. Discuss one wags.r that the government cans fly to increase production and sales of fuel efficient cars to the socially desirable amount. Hint: the government is flying to affect production through costs, net benefits.
- Show the market for cigarettes in equilibrium, assuming that there are no laws banning smoking in public. Label the equilibrium private market price and quantity as Pm and Qm. Add whatever is needed to the model to show the impact of the negative externality from second-hand smoking. (Hint: In this case it is the consumers, not the sellers, who are creating the negative externality.) Label the social optimal output and price as Fe and Qe. On the graph, shade in the deadweight loss at the market output.From an economic viewpoint, the optimal amount of pollution a. is zero because all pollution imposes costs on society. b. is that amount firms create when they maximize economic profits by setting their marginal private costs equal to market price. c. is that amount where the marginal social costs of producing a good precisely equals the price of the good. d. Both answers b. and c. are correct.What is a marketable permit and what incentive does it provide for a firm to account for external costs?
- Identify the following situations as an example of a negative or a positive externality: You are a birder (bird watcher), and your neighbor has put up several birdhouses in the yard as well as planting trees and flowers that attract birds. Your neighbor paints his house a hideous color. Investments in private education raise your countrys standard of living. Trash dumped upstream flows downstream right past your home. Your roommate is a smoker, but you are a nonsmoker.Draw a standard supply and demand diagram for televisions, and indicate the equilibrium price and output. a. Assuming that the production of televisions generates external costs, illustrate the effect of the producers being forced to pay a tax equal to the external costs generated, and indicate the equilibrium output. b. If instead of generating external costs, television production generates external benefits, illustrate the effect of the producers being given a subsidy equal to the external benefits generated, and indicate the equilibrium output.Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC1 = 30 - 6E1 MAC2 = 20 - 10E2. If both firms cut their emissions to zero, then total abatement costs (TAC) for the two firms is ____. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
- Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 22 - 2E_1 MAC_2 = 10 - E_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: MED = .5E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a per-unit tax on emissions. With this tax, the total amount of tax revenue raised is $____. Answer: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.If a Pigouvian tax is used to reduce carbon emissions, it must be set to be equal to1. the private marginal cost of productionb 2.The cost of the catastrophic outcomes 3. the total private cost of production 4.The marginal social cost of carbon emissions