There are three industrial firms in a town Firm Initial Pollution Level Cost of Reducing Pollution by 1 Unit A 30 units $20 B C 40 units 20 units $30 $10 The government wants to reduce pollution to 60 units, so it gives each firm 20 tradable pollution permits. 1. Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation? 2. How much higher would the costs of pollution reduction be if the permits could not be traded?

In the film, The Dark Water 2019, Ducont a huge chemical firm dumps it's waste in air, land and water knowing it's has harmful effects to humans and animal. In reference to the firm answer the set of questions below: (a) What is the cause of the externality in the 2019 film The Dark Water? Determine whether the Coase theorem applies in the film, if not, what results in the theorem breaking down?

The graph shows the unregulated market for electricity. The marginal external cost of the pollution created is equal to the marginal private cost of producing electricity at every quantity of electricity produced. Draw a point to show the marginal social cost when production is 500 kilowatts per day. Label it 1. Draw the marginal social cost curve. Label it MSC. ab Draw a point to show the quantity of electricity produced with no pollution control and the marginal social cost of the electricity generated. Label it 2. Draw a shape to show the deadweight loss with no pollution control. Label it DWL. The deadweight loss created by the pollution is $ >>> Remember that the price given on the y-axis in cents but you must answer in dollars. esc q a @ 2 W S #3 с e d $ 4 65. 1 14 t Oll 6 O & 7 Y 20

Chapter 10 The first government employee suggests reducing pollution through regulation. To meet the pollution goal, the government requires each firm reduce its pollution by 2 units. Complete the following table with the total cost to each firm of reducing its pollution by 2 units. Firm Total Cost of Eliminating Two Units of Pollution (Dollars) Firm A Firm B Firm C ☐☐ Method 2: Tradable Permits Meanwhile, the other employee proposes using a different strategy to achieve the government's goal of reducing pollution in the area from 1 6 units. This employee suggests that the government issue two pollution permits to each firm. For each permit a firm has in its possession, i 1 unit of pollution. Firms are free to trade pollution permits with one another (that is, buy and sell them) as long as both firms can agree on For example, if firm A agrees to sell a permit to firm B at an agreed-upon price, then firm B would end up with three permits and would nee reduce its pollution by only 1 unit…

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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.

Consider a market with the following supply and demand.  (It may help to draw a graph for these questions.) P            5            6            7            8            9            10            11            12           13           14 QS        200       300        400       500        600        700         800          900        1000       1100 QD       800       750        700       650        600        550         500          450         400         350 If there is an external cost of $3, what is the efficient quantity? If there is an external benefit of $3, what is the efficient quantity? For the remaining questions assume that there is a $3 external COST. If the government wants to get the efficient quantity with a per/unit tax, how much should the tax be? Now imagine that they use tradable allowances.  If they cap the quantity at 400 what would the value of these allowance be in the market?  (Assume the market is perfectly competitive and that "one allowance" lets you…

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What is an externality in economics? Explain how a neighbor’s barking dog could be both a positive and a negative externality.   Can pollution ever make us better off? How do we know? Should we aim to eliminate all pollution? If not, what should our goal be? Defend your answer.   When thinking about types of goods, what does rivalry mean? What does excludability mean? What are the four categories of goods we can identify using those attributes, and what is an example of a good in each category?

K Steel production creates pollution. If a tax is imposed on steel production equal to the marginal external cost of the pollution it creates, O A. steel producers will continue to produce the inefficient quantity of steel OB. the deadweight loss created by steel producers will be cut to zero OC. steel producers will cut pollution to zero O D. the market price of steel will rise by the amount of the tax Submit te: