Suppose that the government is going to auction off permits equal to one third of total emissions in the economy (so two-thirds of all emissions must be abated), and that there will be a competitive market for permits sold on an exchange (i.e., in a market) with publicly posted prices so that it is very easy to buy or sell permits. Suppose now that a firm with a marginal abatement cost of $8 has a special opportunity to buy 100 permits at a price of $15 per permit. True or False: The firm should buy the permits even though their marginal cost is below $15.
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- Suppose that the fish processor could use a different production method that involves recycling water. This would reduce the pollution in the lake to levels safe for recreation, and the boat tour would no longer be affected. If the fish processor uses the recycling method, then the fish processor's economic profit is $1,300 per week, and the boat tour's economic profit is $1,900 per week. If the fish processor does not use the recycling method, then the fish processor's economic profit is $1,600 per week, and the boat tour's economic profit is $1,100 per week. These figures are summarized in the following table. Complete the following table by computing the total profit (the fish processor's economic profit and the boat tour's economic profit combined) with and without recycling. Action Profit Fish Processor Boat Tour Total (Dollars) (Dollars) (Dollars) No Recycling 1,600 1,100 Recycling 1,300 1,900 Total economic profit is highest…Respond to the question with a concise and accurate answer, along with a clear explanation and step-by-step solution, or risk receiving a downvote. n the table below are the marginal abatement costs of two firms. Note that an entry in the table indicates the cost of reducing emissions by one unit from the previous level. For example, $104 is the additional abatement cost for Firm 1 to reduce its emissions from 3 tons to 2 tons, and $40 is the cost for Firm 2 to reduce its emissions from 7 tons to 6 tons. 1.In an unregulated environment each firm produces 10 tons of emissions (20 tons total). Using the table above, what emissions levels (i.e., emissions standards) would you assign if you wanted to limit aggregate emissions to 7 tons in a cost-effective manner? Firm 1’s emissions level ________________ Firm 2’s emissions level ________________ 2.Given the emissions levels from Question 1, calculate the total abatement cost for each firm? Firm 1’s total abatement cost ________________…A4 1. Two chemical companies, A and B, operate in a small New England town. Every week A releases 40 gallons of dioxin into the town’s aquifer, while B releases 30 gallons during the same time frame. It would cost A $800 per gallon to clean up its production, while B can clean up its waste at a cost of $500 per gallon. After this issue is raised at a town hall meeting, the town’s residents vote to reduce total dioxin pollution to 20 gallons per week. a. What would be the total cost of pollution reduction if each company were limited to 10 gallons of waste per week? b. What would the total costs be if each company received 10 gallons worth of tradable pollution credits? 2. A wheat farmer and a cattle rancher occupy adjacent parcels of land. Every year the farmer builds a fence to keep the cattle out of his field, and every year the rancher tears the fence down so that the cattle can roam free. The farmer values the wheat that gets destroyed at $300, while the rancher values having a…
- A grape grower with a vineyard in the Edna Valley and in the Carneros appellation in Sonoma/Napa has a contract to produce 18 tons of pinot noir grapes for Gallo. The current allocation of the 18 tons results in a marginal cost of production in the Edna Valley vineyard of $800 (MCev = $800) and a marginal cost of production in the Carneros vineyard of $1200 (MCc = $1200). Explain whether the grower should move one ton of production from the Edna Valley to Carneros or vice versa. Make sure to provide a clear explanation of the outcome consistent with the idea of the equimarginal principle. Make sure to use the correct terms and units.I need help. If you can explain the process and not just give the solution, I would appreciate it, because I'll learn better. A coal-fired power plant produces electricity for a town with a population of 1000. The retail price of electricity is sustained at $50.00, but every unit of electricity emission may cause damage and increased mortality risk of this amount $0.01 for every member of the town next to the plant. With a marginal cost curve MC=q and q is considered the output, what is the marginal damage of every or each unit of emission? What is the optimal quantity output for society? Is there a deadweight loss? When the electric plant decides to maximize profit and chooses q (in the cost curve), what would be the outcome?A study of ethanol as a transportation fuel reveals that the competitive equilibrium is expected to be at a price of $4 per gallon and a consumption rate of 100 million gallons/day. For a production rate of 10 million gallons/day, the marginal cost is found to be $1 per gallon. Also, a a price of $10 per gallon the demand is 10 million gallons/day. Answer the following questions for this system. 1. Determine the equations for the demand and marginal cost lines. 2. Calculate the consumer and producer surplus for the market equilibrium. 3. It was discovered later that the above information ignored a government subsidy of 50 cents per gallon. How will the demand and marginal cost lines, and the competitive equilibrium, change if this subsidy is removed?
- Francis wants to buy some paintings for their store to make it feel more classy. Francis would need to take $20,000 out of their savings account (which earns 1% interest a year) in order to finance the paintings. At the end of the year, Francis knows they could sell the paintings for $20,000 but they would choose not to. When calculating this year's economic profit, Francis would count this as a: a. explicit cost of $20,000 and an implicit cost of $2,000. b. explicit cost of $20,000 and an implicit cost of $20,000. c. explicit cost of $20,000. d. implicit cost of $2,000.Northside Social (NS) sells cups of coffee and amazing breakfast sandwiches. The current price of a cup of coffee is $3.00 and the current price of an amazing breakfast sandwich is $8.00. At those prices, NS sells 1000 cups of coffee and 200 breakfast sandwiches daily. NS faces a constant marginal cost for each cup of coffee of 50 cents and the constant marginal cost of breakfast sandwiches is $2. NS increases the price of coffee 5%, to $3.15. After the price increase, NS sells 900 cups of coffee, a decrease of 10% in cups of coffee. Assuming the above, what if NS also changes the price of breakfast sandwiches from $8 to $10 (a 25% increase in price) and that the number of breakfast sandwiches sold decreases from 200 to 180 (a 10% decrease in quantity). Which of the following is true? A) Coffee profits and breakfast sandwich profits increase.B) Coffee profits decrease by more than breakfast sandwich profits decrease.C) Coffee profits decrease by more than breakfast sandwich profits…Carl and Simon are two pumpkin growers who are the only sellers of pumpkins at the market. The demand function for pumpkins is Q = 8,400 - 800P, where Q is the total number of pumpkins that reach the market and P is the price of pumpkins. Suppose further that each farmer has a constant marginal cost of $.50 for each pumpkin produced. If Carl believes that Simon is going to produce Qs pumpkins this year, then the reaction function tells us how many pumpkins Carl should produce in order to maximize his profits. Carl’s reaction function is QCarl = Group of answer choices a. 2,000 - Qs/2. b. 8,400 - 800Qs. c. 8,400 - 1,600Qs. d. 4,000 - Qs/2. e. 6,000 - Qs.
- Two coal-burning electric power plants are emitting mercury which impairs cognitive development in children. Plant A's marginal abatement cost is MCA= 1.2q and plant B's marginal abatement cost is MCB = 0.3q. Each firm initially emits 50 units and the EPA would like to reduce total emissions to 40. If the EPA follows a command-and-control policy and tells each firm to abate by the same amount, what will be the total costs? If firms could trade permits, what would happen to total costs? Why?Please do only the last one (and please not that beef profuction = 8 as it says in the problem)Please no written by hand solutions 2. Mr Gieves and Mr Hawkes produce items of clothing. The market demand for clothes is y = 13-p with y = y1+y2 and p denoting the market price of clothes. Mr Gieves and Mr Hawkes compete by simultaneously choosing the quantity of clothes to send to the market, and their cost functions are C1 (y1) = y₁ and C₂(y2) = y2 respectively. (a) Set up the profit functions, and derive the reaction functions. (b) Find the Cournot equilibrium of the market. Indicate what the market price, individual outputs and profits are.