Imagine a firm with a marginal abatement cost (MAC) function equal to: MAC = 100 - 10E. The government introduces a per-unit tax on emissions equal to $20. For a profit-maximizing firm, total compliance costs (total abatement costs plus tax payment) are $____.
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Imagine a firm with a marginal abatement cost (MAC) function equal to:
MAC = 100 - 10E.
The government introduces a per-unit tax on emissions equal to $20. For a profit-maximizing firm, total compliance costs (total abatement costs plus tax payment) are $____.
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- Two coal-burning electric power plants are emitting mercury which impairs cognitive development in children. Plant A's marginal abatement cost is MCA= 1.2q and plant B's marginal abatement cost is MCB = 0.3q. Each firm initially emits 50 units and the EPA would like to reduce total emissions to 40. If the EPA follows a command-and-control policy and tells each firm to abate by the same amount, what will be the total costs? If firms could trade permits, what would happen to total costs? Why?A polluting firm’s marginal abatement cost is MACi = 50 – 0.25ei . If a regulator imposes a per-unit emissions tax of t = 10, what level of emissions does the firm choose under the tax? A polluting firm’s marginal abatement cost is MACi = 50 – 0.25ei . If a regulator imposes a per-unit emissions tax of t = 10, how many units did the firm abate relative to the unregulated environment?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 4.50
- 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: 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 ______________Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 18 - 2E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 9 - E. With an emissions tax of $4, the benefits of adopting the new technologies are $____. THE ANSWER IS NOT 5.
- Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 18 - 2E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 9 - E. With an emissions tax of $4, the benefits of adopting the new technologies are $____.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 2. All information is providedSuppose 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
- 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 .(I.) Draw (for yourself) the marginal abatement cost curves for Al and Bob, with “units of runoff abated” on the horizontal axis and “marginal cost” on the vertical axis. How do the curves look like? a. The two lines start from the origin with slopes of 3 and 5 for Al and Bob, respectively b. The two lines are flat with respect to the horizontal axis with intercepts of 3 and 5 for Al and Bob, respectively (II.) To achieve its goal, suppose the local agency asks Al and Bob to abate 10 units each and offers to pay their total abatement costs. What is the total cost to the agency? a. 400 b. 300 c. 250 (III.) (Considering Al’s and Bob’s marginal abatement costs in part (II), has the agency achieved its abatement goal at the lowest possible cost? Why or why not? a. Yes, because the Equimarginal Principle was satisfied b. No, because the Equimarginal Principle was not satisfied c. Yes, because the pollution level was reduced d. No, because the pollution level was not reduced enoughConsider the carbon tax in British Columbia that was imposed in 2008. Suppose that the regulator evaluated aggregate emissions levels a couple of years into the program and aggregate emissions were higher than predicted. Describe a potential reason for this in terms of the regulator’s beliefs about the marginal abatement costs of the regulated firms.