What is the savings in abatement cost from allowing firms

Assignment Help Econometrics
Reference no: EM131134562

Split the Difference for a Pollution Permit. Consider two firms, each of which is issued three marketable pollution permits. For firm H, the marginal cost of abatement is $190. For firm L, the marginal cost of abatement is $130.

a. Is there room for a mutually beneficial exchange of one permit? If so, which firm will buy a permit and which firm will sell a permit?

b. If the two firms split the difference, whats the price of a permit?

c. Suppose that after the exchange of one permit, the marginal cost of abatement for the firm that soldthe permit is $170 and the marginal cost of the firm that bought the permit is $150. Will the firms exchange another permit, or are they done trading? d. What is the savings in abatement cost from allowing firms to buy and sell a permit?

Reference no: EM131134562

Questions Cloud

Heart rate and the height of steps statistically : An experiment was conducted by students at The Ohio State University in the fall of 1993to explore the nature of the relationship between a person's heart rate and stepping up anddown on steps of various heights.
Computer based versus paper based medical records : Discuss the advantages and disadvantages of computer-based versus paper-based medical records that you may have identified through your previous research. Do you prefer paper-based medical records or computer-based records? Explain.
How much money does your firm save by using the offsets : What s the best combination of reforestation offsets and abatement?
Reproduce the retained earnings account for 2010 : Compute the earnings per share of common stock using 240,000 as the weighted average shares outstanding for the year.
What is the savings in abatement cost from allowing firms : If the two firms split the difference, whats the price of a permit?
The scores to be normally distributed : 5.54 A random sample of 20 students yielded a mean of x¯ = 72 and a variance of s2 = 16 for scores on a college placement test in mathematics. Assuming the scores to be normally distributed, construct a 98% con- ?dence interval for s2.
Define how religion intersect with other forms of oppression : How does your family and religious systems lead to your ideas about your own racial ethnic group as well as the racial and ethnic group of others?
The stockholders equity accounts of hashmi company : Enter the beginning balances in the accounts, and post to the stockholders' equity accounts.
What kind of sex chromosome does a person exhibiting : A normal male individual has an XY chromosome and has functional testes. What kind of sex chromosome does a person exhibiting Turner's syndrome have

Reviews

Write a Review

 

Econometrics Questions & Answers

  Program to fit a single hidden layer neural network

Vary the number of hidden units in the network, from 1 up to 10, and determine the minimum number needed to perform well for this task.

  Should it invest in doubling production capacity

Should it invest in doubling production capacity?

  Find probability of getting two reds

What is the probability of getting two reds and one blue in any order? c) What is the probability of getting three reds, given that the first marble is red? d) What is the probability of getting three primary colors (blue or red) given that the first..

  Find the best response function for each firm

Firm 1 and 2 produce differentiated products. If firm 1 sets price at p1 and firm 2 sets its price at p2, then firm 1 sells Q1(p1,p2) units of output and firm 2 sells Q2(p1,p2) units, where Q1(p1,p2) = 6 - 2p1 + p2

  Calculate the 1998-2008 growth rate in sales

A. Calculate the 1998-2008 growth rate in sales using the constant rate of change model with annual compounding.B. Forecast sales for the years 2011 and 2013. The following table shows annual sales data for Stuff Happens.

  Determine the price elasticity of demand for heroin

The price elasticity of demand for heroin is .27. Suppose that half of the existing heroin users support their habits with property crime. Further, the loss from property crimes committed by heroin users equals half of the total spending (total r..

  Describe the impact of various forms of competition

Analyze the dynamics of supply and demand to anticipate market equilibrium.

  What is the capitalized woth of the system

a city is spending $20 million on a new sewage system. The expected life of the system is 40 years, and it will have no market value at the end of its life. Operating and maintenance expenses for the system are projected to average $0.6 million pe..

  Apply the law to the client''s facts or planned transactions

Although Mark continues to teach full-time, he goes to the tennis courts each day after school and practices after fulfilling his duties as an unpaid assistant. During the summer, he spends 12 to 15 hours each day at the tennis courts. In addition..

  Compute the natural rate of unemployment

Suppose that the Phillips curve is given by ?t-?t^e= 0.1-2?t where ?t^e=?t-1 Suppose that inflation in year t-1 is zero. In year t, the authorities decide to keep the unemployment rate at 4% forever. 1. Compute the natural rate of unemployment.

  What are the five types of analytical procedures

What are the five types of analytical procedures?

  Why can this building be considered modern

work will be evaluated for the clarity of the structure, the logic in the development of your argument, and the thoroughness with which you discuss the important point

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