Reference no: EM13520634
Question 1. Regulators are considering controlling the emissions from two local power plants. The marginal benefits (the demands for effluent) derived by these plants from being able to produce a given quantity of effluent are 10,000-Q1 for the first plant and 10,000-2*Q2 for the second facility (where Q1 and Q2 are the quantities of effluent).
a. Graph these two individual pollution demand curves and indicate the levels of pollution (both graphically and numerically) that will be produced by these plants in the absence of regulation.
b. Find the total demand function for effluent implied by these two individual firm demand functions and add it to the graph above.
c. Suppose that the damage from the effluent is MC=2*(Q1+Q2)=2*Q. Add this function to the graph in part (a). What is the efficient level of effluent?
d. Regulators are considering a policy that obligates each plant to limit its emissions to half of the efficient level of total pollution you found in the previous question. Illustrate this policy on a new graph and calculate the total control (abatement) costs of this policy.
e. Acting as a consultant to regulators, you suggest that an alternative might be to impose a tax on each unit of effluent. What would the tax be if it were set at the level to achieve the efficient total amount of effluent? How much effluent would be produced by the two firms?
f. Calculate the control costs under the tax policy and compare their total to that achieved under the command and control policy in (d). Which policy is more cost effective? Why do you expect this finding to be true in general?
Question 2. Two very different commercial sectors produce a common airborne pollutant located in two different geographic regions. One has marginal benefits of pollution of 100-2e1 while the other has marginal benefits of 80-e2.
a. Write the equation for the total demand for emissions across both sectors. Does one sector have uniformly lower marginal abatement costs than the other? What is the total amount of emissions in the absence of regulation?
b. A cap and trade program is created with an initial allocation of 100 permits. After trading occurs, what will be the market price of a unit of quota? How much will each sector emit?
c. Assuming that the initial allocation of quota was proportional to the historical shares of pollution in the previously unregulated market, who is a buyer and a seller in part b and how much quota changes hands?
d. It is later found that the marginal damage function from emissions is MD=(e1+e2)=E. How does the efficient level of emissions compare to the level achieved under the cap and trade policy above? Graphically, depict the net loss to society (the deadweight loss in econ-speak) from over/under abatement of pollution.
Question 3: The owner of a tropical forest harvests timber so as to maximize his own profit from the land. This forested land also provides habitat for wild beehives that pollinate the crops of surrounding farmers. Assume that the number of bees and therefore the magnitude of the pollination services provided are proportional to the size of the intact forest habitat on the landowner’s property. In the absence of an agreement between the landowner and his neighbors, is he likely to harvest too much or too little of his timber at any given time?
Characterize this as an example of a positive or a negative externality.
Question 4: The efficient level of a negative externality is always a positive amount (circle one: True/False). Briefly explain your answer.
Question 5: Examine the graph of marginal benefits and costs of abatement below. Suppose regulators expect these curves to be as shown but are uncertain as to whether or not the marginal costs of abatement curve will be higher or lower than depicted. If regulators must
choose between an emissions tax or tradable quotas, which would be preferred from the perspective of efficiency, given the uncertainty in costs of abatement? Explain in a short paragraph and illustrate on this graph.
|
Create a rock-solid foundation for your philosophy of life
: Reflect on some of your most closely held religious beliefs that you have not really questioned or explored. Why do you think these convictions have been "off limits" for questioning? Can you envision the benefits of putting these beliefs to the test..
|
|
Write the equation for the total demand for emissions
: Write the equation for the total demand for emissions across both sectors. Does one sector have uniformly lower marginal abatement costs than the other? What is the total amount of emissions in the absence of regulation?
|
|
Quality of photography changing through the years
: In what ways do you see the quality of photography changing through the years Compare and contrast an early photo (before the 20th century) and a more recent photo (during the 20th century) and note how it differs in quality and presentatio
|
|
Define argument in physiological sense-socratic method.
: What are the basic pillars of the biblical view of reality? what does christian metaphysics tell us about christian education? Define an argument in the physiological sense. Explain the socratic method.
|
|
Graph these two individual pollution demand curves
: Graph these two individual pollution demand curves and indicate the levels of pollution (both graphically and numerically) that will be produced by these plants in the absence of regulation.
|
|
Actually attains enlightenment rationalism
: Do you think Bigger Thomas in the novel (Native Son) actually attains enlightenment rationalism? If so what are the forces—whether personal or social and political—that prevent him from doing so, or doing so to a full extent?
|
|
Topics in the epistemology
: A general forum for the discussion of readings and topics in the epistemology ?.I mean a topic related to epistemology that can be discussed and arrgued by many people (students) ?
|
|
Factors that contribute to the accuracy of sensory data
: How was photography used as an instrument for social reform? What photograph do you think makes the most powerful social commentary? Explain whether it is possible to think without using language
|
|
What is propaganda
: What is propaganda? What impact did it have on US democracy in the1930s? Do you think that it is possible to have "good" propaganda or is it inherently negative? Support your analysis with theories and/or examples.
|