Determine whether an emission fee or an emission permit

Assignment Help Macroeconomics
Reference no: EM13191352

Consider the case of a regulator and a single polluter. Suppose the regulator knows the marginal damage from pollution but is unsure about the firms marginal savings from emitting. The regulator asks the firm to reveal its marginal savings from emitting schedule. Regulators know that if they use an emission fee, the firm has an incentive to lie about its marginal savings. Regulators also know that if they use a permit system, lying may still result. So the regulator announces that after being told the firm's marginal savings, the regulator will flip a coin to determine whether an emission fee or an emission permit will be used to control pollution. In this case, will the firm have an incentive to truthfully reveal its marginal saving from emissions? Why or why not?

Reference no: EM13191352

Questions Cloud

Why does the autonomous expenditure decreases : how can you explain this is words We can't say consumers are going to save a portion of the 10 taxes because you can't save something that is being taken away from you. Why does the autonomous expenditure decrease by a fraction of the tax in this..
Find the speed of the plan : A plane can fly 410 miles in the same time as it takes a car to go 100 miles. If the car travels 155 mph slower than the plane, find the speed of the plan.
Is this an example of a cluster sample : for a product-testing focus group, a company selects 10 men and 10 women at random from a population that has approximately equal numbers of both. Is this an example of a cluster sample?
What is the width of the scale drawing of the room : Sheila made a scale drawing of a room. The actual room has a width of 44 feet and length of 77 feet. Her drawing has a length of 7 inches. What is the width of the scale drawing of the room?
Determine whether an emission fee or an emission permit : Consider the case of a regulator and a single polluter. Suppose the regulator knows the marginal damage from pollution but is unsure about the firms marginal savings from emitting. The regulator asks the firm to reveal its marginal savings from em..
Find the rate at which water is draining from the tank : Find the rate at which water is draining from the tank after the following amounts of time. (Remember that the rate must be negative because the amount of water in the tank is decreasing.)
Find 95% of confidence interval for variance of the heights : find 95% of confidence interval for variance of the heights of maple tree same of 11 trees has standard dev of 14.
How much pressure does the car exert on the piston : suppose a car sitting on a hydraulic left exerts a downward force of 1,750 N on a piston with an area of 0.6m squared. How much pressure does the car exert on the piston?
Define gas expand isothermally and reversibly : gas expand isothermally and reversibly from 10 bar to 1 bar at t= 25 celcius. calculate q,w, delta u,h,s,a,g. please show how u got the equations

Reviews

Write a Review

Macroeconomics Questions & Answers

  Compute the natural rate of unemployment

Suppose if the economy currently has a frictional unemployment rate of 2%, structural unemployment of 2%, seasonal unemployment of 0.5%, and cyclical unemployment of 2%, determine the natural rate of unemployment?

  What would an economists say that the burden of the fica

What would an economists say that the burden of the FICA tax is shared equally. Who bears more of the tax burden Workers or employers.

  Explain how new soft drink is the most profitable strategy

Prior to 1999, PepsiCo did not have a product that competed directly against Sprite and had to decide whether to introduce such a soft drink. By not introducing a lemon-lime soft drink, PepsiCo would continue to earn a $200 million profit, and Coc..

  Explain how many major wireless phone handset manufacturers

Explain how many major wireless phone handset manufacturers are there. What is the market structure. What pricing strategies do wireless phone handset manufacturers use.

  Explain how do you go about drawing an indifference

Explain how do you go about drawing an indifference for such a utility function.

  Why it is important that prices are flexible in our economy

Why it is important that prices are flexible in our economy? What happens if the government controlled the level of prices, how would this influence prices? How can you relate the law of demand to a recent purchase that you have had to make?

  Describe sustainable and conventional agriculture

For each of the following concepts provide a definition, a complete explanation as to their significance, and a practical example.

  Discussion on the company goals

The Millennium Development Goals aims were to be achieved by 2015. A few will be met; many others will not. In either case despite great progress, poverty will remain a serious ongoing concern.

  Current event article which relates to government

Associate a current event article which relates to government regulations or antitrust activities.

  Mmachines of newspaper are designed one paper at a time

Mmachines of Newspaper vending are designed so that once you have paid for one paper; you could take more than one paper at a time.

  Question about adverse selection and finance

Households make four kinds of economic decisions. Assume you have two households with the same income. Household A has one income earner and Household B has two income earners.

  Descriptions for interest rate and market and decision

Identify how interest rates affect the cost of operating the business-Explain how business planning and operations are dependent on monetary variables other than interest rates

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd