MAC = 50 - 5E.   The government offers a $30 per-unit subsidy for abatement. In principle, the firm could ignore the subsidy and continue to emit as many emissions as it was in the absence of government intervention, but there is money to be made from cutting back its emissions. Compared to ignoring the subsidy, how much money could a cost-minimizing firm save or make by cutting back its emissions?

In the graph below, circle the efficient level of emissions.

Imagine a firm's marginal abatement cost function with existing technologies is: MAC = 200 - 10E. If the firm adopts new pollution abatement technologies, its marginal abatement cost function will be: MAC = 100 - SE. With a tax on emissions of $20, the benefits of adopting the new technologies equal:  Select one: a. $30. b. $20. c. $25. d. $50.

Imagine a firm’s marginal abatement cost function with existing technologies is: MAC = 12 – E. If the firm adopts new pollution abatement technologies, its marginal abatement cost function will be: MAC = 6 – 0.5E. The adoption costs for the new technology are $6. If the government raises the tax on emissions from $2 to $4, the firm's total costs increase by $_____. HINT: Total costs include tax payments, total abatement costs, and (if relevant) adoption costs for the new technology. Select one: a. $12. b. $8. c. $10. d. $16.

Market demand is MWTP= 76 - 2Q. Market supply is MC = 12 + Q. Each unit transacted results in a $Q external cost. How many units does the market produce more than the efficient quantity?

Oregon legislative committee passes cap-and-trade bill Lawmakers are moving Oregon a step closer to adopting what would be the nation's second economywide carbon pricing scheme. after California. Price and cost (cents per mile) Q 40- S=MC a G Source: Portland Business Journal, May 17, 2019 35 The transportation sector is Oregon's largest contributor to carbon emissions. Under what conditions would Oregon's carbon pricing scheme reduce carbon emissions to the efficient quantity? Use a graph to illustrate your explanation. Show the effects of setting the price of carbon too low and too high. 30- 25 20 15 and permits traded at a The efficient quantity of transportation would be produced if the quantity of permits was set such that, price OA. marginal private cost of transportation equals marginal benefit, above marginal external cost B. marginal social cost of transportation equals marginal benefit, equal to marginal external cost OC. marginal social cost of transportation equals marginal…