• Draw a correctly labeled graph showing the MSC and MSB of pollution. Assume that all pollution costs are external. On your graph, show the market quantity of pollution if there is no government intervention and the efficient quantity of pollution

• Draw a correctly labeled graph showing the MSC and MSB of pollution. Assume that all pollution costs are external. On your graph, show the market quantity of pollution if there is no government intervention and the efficient quantity of pollution

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

• Draw a correctly labeled graph showing the MSC and MSB of
pollution. Assume that all pollution costs are external. On your
graph, show the market quantity of pollution if there is no
government intervention and the efficient quantity of pollution
Modulo 75.

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No hand written solution Afirm has an industrial plant that emits pollutants into a town’s lake. The plant’s marginal abatement function is MAC= 200 – 0.5E and damages caused by its emissions are given by MD = 2E where emissions are in kg. per day. What is the socially efficient level of emissions from this plant? Illustrate this in a graph. As an incentive to reduce emissions to the socially efficient level, government offers to pay the firm for each kg. of emissions it abates per day from this plant. What subsidy per kg. should the government offer? If the plant abates to the socially efficient level of emissions, what total subsidy payment would the firm receive? Identify the area in your graph. How much better or worse off would the firm be compared to if it did no abating? Identify the area in your graph. What would be the net benefit to society if we pay the firm to reduce the plant’s emissions to the socially efficient level? Identify this area in your graph.
Q. 4
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Help plz graph plz 3 8
5. Which of the following best describes the issuance of permits to pollute as a way of influencing the amount of pollution? Permits to pollute: a. encourage business to pollute.b. should be purchased by those whose pollution is the least expensive to eliminate.c. should be purchased by those whose pollution is the most expensive to eliminate.d. are preferable over taxes because they can be limited to exactly the efficient amount of pollution.