xplain why. 2. In a small town, a paper mill discharges wastewater to the river, causing water pollution. Suppose MD- 3E and MA - 40 - 2E. Calculate the following and illustrate your answers with graphing: a) What is the socially efficient level of emission? What is the total social cost related to this level of emission? b) Consider a liability law requiring the polluter to compensate for all the damages caused. What is the poluter's optim choice of emission level? What is the total compliance cost at this level? c) Consider an emission standard set at the efficient level. What is the polluter's total compliance cost at this level? d) Consider an emission tax policy. What is the optimal tax rate to achieve the efficient emission level? What is the polluter's total compliance cost at this level? e) Consider an abatement subsidy policy. What is the ontimal

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Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.