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- QUESTION 8 Suppose the Queensland Government is considering limiting the number of visitors to the Great BarrierReef. In CBA, the total value of the Great Barrier Reef is estimated to be 200 million dollars while the use- value isestimated to be 80 million dollars. This implies the non - use value of it must be_______million dollars, after limiting thenumber of visitors, its use -value will______(increase, decrease or remain unchanged). Provide your answer to thenearest million and do not include the S sign in your answer.Three neighboring towns – Marshland, Dampland, and Wetland – all border the same lake. The lake frequently floods causing damage to property in all three towns. Each town would benefit from flood mitigation, but the level of benefits differs. With Z representing the level of mitigation: for Marshland, MB = 3 – Z for Dampland, MB = 4 – 2Z for Wetland, MB = 11- Z The marginal cost of flood mitigation is MC = 2 + 12Z Questions: ***Please Note*** Previous Expert Calculated: Z = 16/3 as the Solution to (a) Math Solver Calculates: Z = 1 ***Please Resolve*** (a) What is the socially optimal level of Z? (b) What would each individual town be willing to pay for this level of flood mitigation? (c) The representative from Wetland proposes that each town pay an equal share for the optimal level of flood mitigation. Would…Suppose that Penn Products and Teller Industries are both emitting 30 metric tons of perfluorocarbons (PFCs) into the atmosphere. Regulators wish to reduce emissions to 40 metric tons overall, and plan to achieve this with a system of tradable permits. Penn’s marginal abatement costs are given by MACP = 5eP, where eP is the number of metric tons of emissions that Penn is cutting. Thus, the cost of cleaning up the first metric ton is $5, the second ton costs $10 to clean up, and so on. Teller’s marginal abatement costs are given by MACT = 7.5eT, where eT is the number of metric tons of emissions that Teller cuts. a. The lowest-cost way to reduce emissions is found when both firms’ marginal abatement costs are equalized. Equate Penn’s and Teller’s marginal abatement costs, and solve for eP in terms of eT. For each metric ton that Teller cuts, how many tons should Penn cut? b. Because 20 metric tons are to be cut, we know that eP + eT = 20. Use your…
- Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 8 - E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 4 - 0.5E. Moreover, assume that the adoption costs for the new technologies are $3. If the government raises the tax on emissions from $1 to $3, then the firm's total costs increase by $____. (Hint: total costs are different from total compliance costs. Total compliance costs are the sum of TAC and tax payment, while total costs are the sum of total compliance costs and adoption costs (remember that adoption costs are only incurred if the firm actually decides to adopt the new technology).) Please round your final answer to two decimal places if necessary. THE ANSWER IS NOT 9Consider a uniformly mixed pollutant. If all of the polluters have different individual marginal abatement cost functions, then it wll not be possible to design a cost effective policy. Select one: O a. True O b. FalseSuppose 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
- Show all work. Draw graphs to explain your answers. The correct answers will include areas on the graph and dollar values. Suppose a chemical factory discharges waste products into a river resulting in significant damages to a local fishery. The marginal damage to the fishery (measured in terms of the value of lost fish stocks) is represented by the equation:MDC = 10E The chemical factory can reduce its effluent flows by treating its waste products. Its marginal abatement cost (MAC) function is given by the equation: MAC = 1,200 - 5E. What level of emissions will occur if the chemical factory is not regulated? What would the total abatement costs for the chemical factory be if emissions are controlled and reduced to zero? If no liability laws are in place, what damages will the chemical factory inflict on the fishery? (Hint: find TDC) If the government puts in place a liability law that requires the chemical factory to compensate the fishery for the damages it causes,…The Swedish Environmental Protection Agency investigates how emissions of an environmentally hazardous substance from an industrial sector should be regulated, either through a tax on the emissions or through a quantitative regulation (limit value). As this is a new substance (new substance), knowledge of the level of environmental damage and the costs of reducing emissions is uncertain. In more technical terms: the regulatory authorities do not have complete information on the positions on either the dD / dM curve (marginal damages) or the MAC curve (marginal abatement costs). a) Explain and show graphically whether - and if so how - the uncertainty about the position of the MAC curve affects the choice between regulating emissions with a tax or limit value from a socio-economic efficiency perspective. b) Explain and show graphically whether - and if so how - the uncertainty about the position of the dD / dM curve affects the choice between regulating emissions with a tax or limit…The marginal benefit of being able to emit a ton of sulfur dioxide emissions for two firms are given by:MBX = 1000 – ( Ex / 2 )MBY = 600 – ( Ey / 3 ) Note that these marginal benefit figures can be interpreted as marginal cost of abating emission down to levels Ex and Ey.Government regulators want to reduce total sulfur dioxide emissions to a total of 1800 tons.a) If the government imposes the same standard of 900 tons maximum emissions on both firms what would be the total cost of abatement (calculated as the aggregated marginal benefits forgone)? b) If the government distributed 900 tradable pollution permits (one ton each) to each firm what would be the final allocation of these permits after the firms trade them?c) What would be the total cost of abatement in this latter case?
- Suppose the aggregate MAC function is 100 - 20W and aggregate MD = 5W for a polluting industry. 1. 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 2. What would the polluting industry's total abatement costs equal if it faced an emissions tax rate equal to 20 dollars per unit emitted? A. 60 B. 20 C. 10 D. 0Plants A and B emit 12 tons and 6 tons of carbon dioxide (CO2), respectively. MAC(marginal abatement costs) for a = 12 - Ea, MACb=12-2Eb MD(marginal damage) = 1/3*E (E indicates CO2 emission) Suppose that the emission trading system is introduced and the right to emit 7 tons is given to power plant A and the right to emit 5 tons is given to power plant B. In order for emission permits to be traded, the price of one unit of emission permits must be at least a certain amount (minimum price) and conversely, how much must be less than a maximum (maximum price), that is, explain the fluctuation range of the emission permit price.Imagine a firm with a marginal abatement cost (MAC) function equal to: MAC = 27 - 3E. The government introduces a per-unit tax on emissions equal to $6. For a profit-maximizing firm, total compliance costs (total abatement costs plus tax payment) are $____.
