Suppose marginal damages due to industrial chlorine emissions e into a river system are defined by the equation MD = e. Assume that marginal abatement costs also are linear in the emission level: 1200 – e/2 for e<2400 MC = otherwise (a) Calculate the pollution level in the absence of any regulation. (b) Calculate the optimal level of pollution assuming it can be obtained costlessly. Now suppose there are transactions costs of altering pollution output equal to T = 500,000. Does the assignment of property rights now matter for efficiency? What is the optimal level of pollution taking account of the transactions costs? (c) Now suppose the marginal damage of chlorine release is e/4 instead of e. If the transactions and negotiation costs are as in (iii), what now would be the optimal level of pollution taking account of the transactions and negotiation costs? (d)

Suppose marginal damages due to industrial chlorine emissions e into a river system are defined by the equation MD = e. Assume that marginal abatement costs also are linear in the emission level: 1200 – e/2 for e<2400 MC = otherwise (a) Calculate the pollution level in the absence of any regulation. (b) Calculate the optimal level of pollution assuming it can be obtained costlessly. Now suppose there are transactions costs of altering pollution output equal to T = 500,000. Does the assignment of property rights now matter for efficiency? What is the optimal level of pollution taking account of the transactions costs? (c) Now suppose the marginal damage of chlorine release is e/4 instead of e. If the transactions and negotiation costs are as in (iii), what now would be the optimal level of pollution taking account of the transactions and negotiation costs? (d)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Use the model of environmental pollution to model the following changes in a polluting industry to: i) the socially optimal level of pollution; ii) the total abatement costs; and ii) the total damage costs (а) A new technology is invented that allows firms to reducе pollution associated with each level of production output. (b) The government announces a new commitnment to more strictly enforce current environmental regulations. (c) A new study finds the pollutant in question to be more carcinogenic than originally thought.
The revenues from an emissions-charge approach to controlling climate change would be unusually large in comparison to other pollutants. What circumstances would lead to high revenues?
None
Suppose the marginal damage cost is estimated to be MD = 0.8E and the marginal abatement cost is estimated to be MAC = 90 - E. Find the following: a) The socially efficient level of emission b) How much emission could be reduced from the uncontrolled level? c) the Total Social Costs d) Draw the graphs and show your calculations.
Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 12-2E_1 MAC_2=9-E_2, and assume marginal external damages (MED) from aggregate emissions from the two firms (E_Agg) is: MED = E_Agg. Total external damages at the socially efficient level of aggregate emissions is Answer: 1
Please drag and drop the markers 1 through 5 below to denote the appropriate position on the diagram that answers the question. a) Show with marker 1 the efficient level of marginal abatement costs. b) Show with marker 2 the marginal abatement costs if each produce must reduce pollution to 7.5 units. c) Denote with marker 3 the area that measures total abatement costs for each polluter. d) Show with marker 4 the marginal abatement costs if sources 1 and 2 merged and were constrained to a maximum total emissions of 15 units. e) Show with marker 5 the total abatement costs if both sources merged and were constrained to a maximum total emissions of 15 units. Marginal Cost (in dollars) MC MC, Quantity of Emissions Reduced A Source 1 10 5 4 13 14 15 15 14 13 12 11 10 8 O Source 2 5
Find Pure Strategy Nash equilibirum then use following values for emissions.
3. The total (abatement) cost for cutting down on CO2 by R is C(R) = 7R²+10R. The total benefit of CO2 abatement to the society is B = 100R.. Compute the socially optimal level of abatement (pollution control).
Please help me with this question ASAP
Please don't copy
Marginal Damages of Pollution: MD = 40 Marginal Abatement Cost: MAC = 100 -2Q e. Calculate and compare the change in welfare for Mr. Peabody's coal plant under the efficient tax and efficient subsidy (i.e. the difference in the plant's welfare under a tax (subsidy) compared to no policy at all).
two types of consumers( workers an retirees) share a community with a polluting cheese factory. the polution is nonrival and nonexcludable. the total damage to workers is p2 where p is the amount of pollution and the total damage to retirees is 3p2 . thus marginal damage to workers is 2p and marginal damage to retirees is 6p. according to an anlaysis by consulting engineers, the cheese factory saves 20p-p2 by pollluting p, for a marginal savings of 20-2p. a.Find the aggregate(including both types of sonsumers) marginal damage for the public bad. b..graph the marginal savings and aggregate marginal damage curves with pollution on the horizontal axis. c. how much will the cheese factory pollute in the abscence of any regulation or bargaining? what is the societys optimal level of pollution? d. starting from the uncontrolled level of pollution calculated in part(c), find the marginal willingness to pay for pollution abatment, A, for each consumer class. (abatment is the reduction in…