marginal willingness to pay for pollution abatement, A, for each consumer class.(Abatement is reduction is pollution; zero abatement would be associated withthe uncontrolled level of pollution.) Find the aggregate marginal willingness topay for abatement.Again starting from the uncontrolled level of pollution, what is the firm's mar-ginal cost of pollution abatement? What is the optimal level of A?е.f.Are the problems of optimal provision of the public bad (pollution) and the pub-lic good (abatement) equivalent? Explain why or why not.6.) Consider the problem of carbon dioxide emissions. We will abstract away from theproblem slightlyOECD (O) and the rest of the world (R). Suppose the marginal cost of controlling CO2emissions is $10 per ton of emis sions. Let the marginal willingness to pay for pollu-tion reduction be 13- Q for region O and 12-2Q for region R, where Qis the amountaUof pollution reduction. The United Nations is considering two proposed methodsfor controlling CO, emissions, both involving polluters paying for the damage theycause. Proposal A involves the polluters paying damages to each region for the pollu-tion generated. Proposal B involves the polluters in each region independently nego-tiating pollution reductions, assuming the other region is not undertaking pollutionreduction.assuming there are polluters and consumers in two regions, theGraph the marginal abatement cost and the total marginal willingness-to-payschedules. What is the socially efficient level of emission reductions, Q?а.How much total pollution reduction will occur under proposal A and whatwill be the total compensation received by regions O and R? If those paymentswere instead placed in the general coffers of the UN, would the outcome be anydifferent from an efficiency point of view? Why or why not?How much pollution would be generated under proposal B? Explain any differ-ences between this answer and the answer to parts (a) and (b).osls b.hC.7. In the manner of Figure 5.8, draw a set of indifference curves such that an individ-ual's private provision of the public good increases as the number of people in thesociety increases. Explain your result. Are these indifference curvesplausible?aonuV 7.Read Gramlich, Ch 8 pp. 143-148 discussion of the Tejust the Tellico Dam section) and OMB Circular A4. BoBenefits" section.J Bring two hard copies of a properly formatted and updat

Question
Asked Sep 18, 2019
41 views
marginal willingness to pay for pollution abatement, A, for each consumer class.
(Abatement is reduction is pollution; zero abatement would be associated with
the uncontrolled level of pollution.) Find the aggregate marginal willingness to
pay for abatement.
Again starting from the uncontrolled level of pollution, what is the firm's mar-
ginal cost of pollution abatement? What is the optimal level of A?
е.
f.
Are the problems of optimal provision of the public bad (pollution) and the pub-
lic good (abatement) equivalent? Explain why or why not.
6.) Consider the problem of carbon dioxide emissions. We will abstract away from the
problem slightly
OECD (O) and the rest of the world (R). Suppose the marginal cost of controlling CO2
emissions is $10 per ton of emis sions. Let the marginal willingness to pay for pollu-
tion reduction be 13- Q for region O and 12-2Q for region R, where Qis the amount
aUof pollution reduction. The United Nations is considering two proposed methods
for controlling CO, emissions, both involving polluters paying for the damage they
cause. Proposal A involves the polluters paying damages to each region for the pollu-
tion generated. Proposal B involves the polluters in each region independently nego-
tiating pollution reductions, assuming the other region is not undertaking pollution
reduction.
assuming there are polluters and consumers in two regions, the
Graph the marginal abatement cost and the total marginal willingness-to-pay
schedules. What is the socially efficient level of emission reductions, Q?
а.
How much total pollution reduction will occur under proposal A and what
will be the total compensation received by regions O and R? If those payments
were instead placed in the general coffers of the UN, would the outcome be any
different from an efficiency point of view? Why or why not?
How much pollution would be generated under proposal B? Explain any differ-
ences between this answer and the answer to parts (a) and (b).
osls b.
h
C.
7. In the manner of Figure 5.8, draw a set of indifference curves such that an individ-
ual's private provision of the public good increases as the number of people in the
society increases. Explain your result. Are these indifference curves
plausible?
aonu
V 7.
Read Gramlich, Ch 8 pp. 143-148 discussion of the Te
just the Tellico Dam section) and OMB Circular A4. Bo
Benefits" section.
J Bring two hard copies of a properly formatted and updat
help_outline

Image Transcriptionclose

marginal willingness to pay for pollution abatement, A, for each consumer class. (Abatement is reduction is pollution; zero abatement would be associated with the uncontrolled level of pollution.) Find the aggregate marginal willingness to pay for abatement. Again starting from the uncontrolled level of pollution, what is the firm's mar- ginal cost of pollution abatement? What is the optimal level of A? е. f. Are the problems of optimal provision of the public bad (pollution) and the pub- lic good (abatement) equivalent? Explain why or why not. 6.) Consider the problem of carbon dioxide emissions. We will abstract away from the problem slightly OECD (O) and the rest of the world (R). Suppose the marginal cost of controlling CO2 emissions is $10 per ton of emis sions. Let the marginal willingness to pay for pollu- tion reduction be 13- Q for region O and 12-2Q for region R, where Qis the amount aUof pollution reduction. The United Nations is considering two proposed methods for controlling CO, emissions, both involving polluters paying for the damage they cause. Proposal A involves the polluters paying damages to each region for the pollu- tion generated. Proposal B involves the polluters in each region independently nego- tiating pollution reductions, assuming the other region is not undertaking pollution reduction. assuming there are polluters and consumers in two regions, the Graph the marginal abatement cost and the total marginal willingness-to-pay schedules. What is the socially efficient level of emission reductions, Q? а. How much total pollution reduction will occur under proposal A and what will be the total compensation received by regions O and R? If those payments were instead placed in the general coffers of the UN, would the outcome be any different from an efficiency point of view? Why or why not? How much pollution would be generated under proposal B? Explain any differ- ences between this answer and the answer to parts (a) and (b). osls b. h C. 7. In the manner of Figure 5.8, draw a set of indifference curves such that an individ- ual's private provision of the public good increases as the number of people in the society increases. Explain your result. Are these indifference curves plausible? aonu V 7. Read Gramlich, Ch 8 pp. 143-148 discussion of the Te just the Tellico Dam section) and OMB Circular A4. Bo Benefits" section. J Bring two hard copies of a properly formatted and updat

fullscreen
check_circle

Expert Answer

Step 1

(a) Given that marginal willingness to pay by the polluter from region O is  13-Q where marginal willingness to pay for region R is 12-2Q. Thus total willingness to pay by the polluter in the moth the region is sum total of the willingness to pay in both the region.

help_outline

Image Transcriptionclose

Kegion O 16 Rigion R MOTP MP 5-30 MWIP 13-6 81a

fullscreen
Step 2

The social optimum level of reduction in the amount of pollution reduced when marginal willingness to pay (MWTP) is exactly equal to marginal cost (MC). on the equating the above two social optimum output is 5 units that is pollution is decreased by 5 units

help_outline

Image Transcriptionclose

MWTP MC MWTP 10 25-30 MC-10 g =5 13

fullscreen
Step 3

(b) Under policy A, where each polluting firm needs to pay the compensation to both the regions, optimum level of reduction in the quantity of pollution for both the polluter is 5 units that is where total MWTR is equal to MC. Putting the value of Q in the marginal willingness to pay for both the region, optimum compensation for region O  an...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Economics

Related Economics Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: Why did the budget surpluses in 2000 and 2001 give way to a series of budget deficits beginning in 2...

A: In the 2000 and 2001 budget surplus was 2.5% and the cyclical adjusted budget surplus was 1% to the ...

question_answer

Q: Aggeliki works for a multinational corporation. They relocate her to a city in which housing and foo...

A: Let's say her current income is $100 out of which she spends $X on housing and $Y on food. Remaining...

question_answer

Q: With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume t...

A: Solution- Dear student Thank you for submitting your question. Since we only answer up to three sub ...

question_answer

Q: After a careful statistical analysis, the Chidester Company concludes the demand function for its pr...

A: The formula of Price Elasticity of demand 

question_answer

Q: Assume agricultural products are identical and there are many sellers and buyers of agriculture prod...

A: It is given that, the agricultural products are identical and there are many buyers and sellers of a...

question_answer

Q: Let’s say that Marianne is a politician who promises cheaper gasoline for everyone in the country if...

A: From the aforementioned question, it can be stated that Marianne is one of the politicians who are c...

question_answer

Q: Below is a supply and demand curve for spaghetti. Assume that the price of rice increases and the pr...

A: Substitute goods are those goods which can be used for same purpose by same consumers. Therefore, in...

question_answer

Q: Suppose a new regulation lowers the interest rates banks can offer on checking account funds. This w...

A: Money demand is the demand for cash balances by the individuals in the economy.Money supply is the t...

question_answer

Q: Why are monopolies for the most part illegal?

A: Monopoly Market: Monopoly market refers to the market situation where a single firm enjoys the large...