There are two power plants in a country and both are damaging to the environment. Together they emit 500 tons of sulfer dioxide per month,but the government would like to reduce emissions to 50 tons (eд+ eg 50). The firms have the following Marginal Abatement Cost Curves:MACA 300-3еAMAC 200-2eBGiven that the government wants to use an optimal effluent tax to reduce the total combined level of emissions to 50 tons, what is the optimalnumber of emissions for firm A under this effluent tax?4040Question 2Using the information in question 1A, what is the optimal number of emissions for firm B?10Question 3Using the information in question 1C, what is the optimal effluent tax?180Question 41 pts1 pts1 ptsUsing the information from question 1A, what is the total cost (tax cost abatement cost) for firm A? (hint: you may want to draw a graph tohelp you answer the question).12.600

The total reduction in emissions required is the difference between the current emissions and the…

Answered: There are two power plants in a country…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The travel time (t) on the segment of a highway connecting city A with city Bhas been observed to follow the equation below, as a function of traffic flow(v): t = 15 + 0.02v, where t and v are measured in minutes and vehicles perhour, respectively. The demand function for travel connecting the two cities isv = 3500 – 120t.a) Determine the equilibrium time and traffic flow.b) If the length of the highway segment is 30 kilometres, what is the averagespeed of vehicles traversing this segment at equilibrium conditions?
Imagine a firm with a marginal abatement cost (MAC) function equal to: MAC = 27-3E. The government introduces a per-unit tax on emissions equal to $6. For a profit-maximizing firm, total compliance costs (total abatement costs plus tax payment) are $ Answer:
Which of the following policies aimed at reducing sulfur pollution would create an incentive for firms to find new innovative ways to reduce sulfur emissions? (Select all that apply) A requirement that all firms use a scrubber that removes sulfur from the smoke stack Marketable permits for sulfur emissions A sulfur pollution charge A requirement that all firms use a certain type of fuel
A utility company is closely monitoring a new set of federal guidelines recently passed by the EPA (Environmental Protection Agency) regarding allowable green house (CO2) emission levels. In this example, the primary external factor of concern for the utility company in question. environment is the A Technological Regulatory (also political and legal) C Competitive D Economic
109 83 35 38 T B a V Y D₂ 223 634 1374 Emissions Consider the figure above if the government imposes a cap and trade system with a cap of 925 units of emissions, then what areas reprosent the total cost of abatiment? E 925 W
What are the estimated abatement cost curves? What would the pollution standard be if they achieved the social optimum? What about an optimal pollution tax?
Suppose a power generating plant emits particulates that damage crops and affect human health. The relationship between emissions and environmental damage is represented by the marginal damage function, MD=9e where e represents tons of emissions per month. The cost to the firm (and society) of eliminating emissions is represented the marginal abatement cost function, MAC=108.5 - 6.5e Both MD and MAC are dollar costs per month. If the power generating firm were allowed to ignore the social cost of its emissions, what would be the firm’s monthly emission level? Calculate the socially efficient level of pollution. If the emissions calculated in part B is a level found to shorten some people’s lives, could it still be considered socially efficient? Suppose the EPA set an emission standard at the socially efficient level calculated in part B. Calculate the cost to the firm of achieving this standard. Suppose that instead of a standard, the EPA charged an emissions tax. The tax is set at…
Discuss factors affecting the effectiveness of the cost analysis of transport markets.
The Swedish Environmental Protection Agency investigates how emissions of an environmentally hazardous substance from an industrial sector should be regulated, either through a tax on the emissions or through a quantitative regulation (limit value). As this is a new substance (new substance), knowledge of the level of environmental damage and the costs of reducing emissions is uncertain. In more technical terms: the regulatory authorities do not have complete information on the positions on either the dD / dM curve (marginal damages) or the MAC curve (marginal abatement costs). a) Explain and show graphically whether - and if so how - the uncertainty about the position of the MAC curve affects the choice between regulating emissions with a tax or limit value from a socio-economic efficiency perspective. b) Explain and show graphically whether - and if so how - the uncertainty about the position of the dD / dM curve affects the choice between regulating emissions with a tax or limit…
Lecture: Externality - Pigou8. All-Leather is a tanning company located on Lake Michigan in Chicago. Its total cost functionis C(QA) = 125 + 8QA + 5QA2, where QA is leather production per week in thousands of pounds.a) If leather sells for $408 per thousand pounds, how much leather will All-Leather produce?How much profit does All-leather earn?Enjoy is a beverage company located on Lake Michigan near All-Leather in Chicago. Enjoy’sproduction of beverages is negatively affected by water pollution from All-Leather’s productionof leather. Enjoy’s total cost function to produce beverages isC(QE) = 10QE +3QE2 + 3QA2where QE is Enjoy’s weekly production of beverages, in thousandsof gallons and, as above, QA is All-Leather’s weekly production of leather.b) Is this an example of a pecuniary externality or a real externality? Explain.c) What is the extra cost to Enjoy from an additional thousand tons of leather production by AllLeather (i.e., the external marginal cost of an extra unit of QA…
State whether the fallowing statements is TRUE or FALSE. Explain your reasoning briefly. a) Noise produced by alcraft around an international airport is excudable and rival.

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