Consider a coal-fired power plant, which emits smoke. The smoke harms tourism at a fishing lodge on a neighboring lake. The owner of the lodge would like the plant owner to install a smokestack scrubber to reduce the pollution. The scrubber costs $37,000. The lodge owner offers to pay the plant owner $8,000 a year during the next five years if he installs the scrubber. Should the plant owner accept the deal? Clearly state vour assumptions,

13. 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? What would be the total cost of abatement in this latter case?

Suppose there are only two polluting firms, called A and B, with the following marginal abatement costs: 1602AA MACe=− and 100BB MACe=−, where A e represents firm A’s emissions in tons and B e represents firm B’s emissions in tons. Suppose the government wishes to ensure that the two firms together emit 60 tons of the pollutant and uses a Tradable Emission Permit (TEP) policy. Assume that each TEP allows its holder to emit 1 ton, and that the market for permits is perfectly competitive. a. Suppose the government initially distributes the total number of TEPs it issues  equally between the two firms. The permits are distributed free of charge. Once trade in permits takes place, what will be the equilibrium in the market for TEPs (i.e. which firm will buy how many TEPs from the other, and at what price)?  b. Briefly describe three problems of setting up a TEP market.

Consider the given diagram showing the monthly market demand for electricity, where the electricity is generated by burning coal. The mining processing and burning of coal have considerable environmental and health costs associated that are not reflected in the market price for the final product-electricity. The diagram shows the market demand for electricity and private marginal costs of production Current estimates for the hull social cost of electricity generated by burning coal vary greatly but suggest that it could be many times higher than current market prices in Canada and the United States Supposing the demal cost associated with producing one kilowat hou (at) of electricity is $0 25, draw the marginal social cost curve for this market Use the ine drawing tool to plot the marginal social cont curve. Propedy label this fine Caelully follow the instructions above and only drew the required objects 5 45 4 35 8* 20 15 10 S (18,50) Di M 90 Mons of wh of Edicty MC 18

The market for plasticans is perfectly competitive. Market Supply is given by Q=3P and Market Demand is given by Q=377-3P. Each extra unit of plastican produced creates a positive externality of $9. What is the efficient quantity? Enter a number only. 202

A firm produces microwaves for $75$⁢75 each, including external costs of $17$⁢17 per unit. A new production technology reduces pollution, so the external costs decrease to $9$⁢9 per unit. The quantity supplied increases, and the firm's private costs of production decrease by $12$⁢12.What is the price of a microwave after the firm starts using the new technology? Write the exact answer. Do not round.

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…