Principles of Microeconomics
7th Edition
ISBN: 9781305156050
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 10, Problem 10PA
Subpart (a):
To determine
Total cost.
Subpart (b):
To determine
Total cost.
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There are three industrial firms in Kitona. The Government wants to reduce pollution to 120 units, so it gives each firm 40 tradable pollution permits.
Firm
Initial Pollution Level
Cost reducing pollution by 1 unit
A
70 Units
$20
B
80 Units
$25
C
50 Units
$10
Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation?
There are three identical firms in Happy Valley.
Firms
Initial Pollution Level
Cost of Reducing Pollution by 1 unit
A
30 units
$20
B
40 units
$30
C
20 units
$10
The government wants to reduce total pollution to 60 units, so it gives each firm 20 tradable permits.
Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so? What is the total cost of pollution reduction in this situation?
How much larger would the cost of pollution reduction be if the permits could not be traded?
There are three industrial firms in Kitona. The Government wants to reduce pollution to 120 units, so it gives each firm 40 tradable pollution permits.
Firm
Initial Pollution Level
Cost reducing pollution by 1 unit
A
70 Units
$20
B
80 Units
$25
C
50 Units
$10
Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation?
How much higher would the cost of pollution reduction be if the permits could not be traded?
Chapter 10 Solutions
Principles of Microeconomics
Ch. 10.1 - Prob. 1QQCh. 10.2 - Prob. 2QQCh. 10.3 - Prob. 3QQCh. 10 - Prob. 1CQQCh. 10 - Prob. 2CQQCh. 10 - Prob. 3CQQCh. 10 - Prob. 4CQQCh. 10 - Prob. 5CQQCh. 10 - Prob. 6CQQCh. 10 - Prob. 1QR
Ch. 10 - Prob. 2QRCh. 10 - Prob. 3QRCh. 10 - Prob. 4QRCh. 10 - Prob. 5QRCh. 10 - Prob. 6QRCh. 10 - Prob. 1PACh. 10 - Prob. 2PACh. 10 - Prob. 3PACh. 10 - Greater consumption of alcohol leads to more motor...Ch. 10 - Prob. 5PACh. 10 - The many identical residents of Whoville love...Ch. 10 - Prob. 7PACh. 10 - Prob. 8PACh. 10 - Prob. 9PACh. 10 - Prob. 10PA
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