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Suppose the marginal external cost of emissions of a certain substance is equal to $16. Furthermore assume that there are two sources of these emissions. The unregulated emissions (Ei), total cost of abatement (TCAi), and marginal cost of abatement (MCAi) for the two sources are given below: Source 1: E1 = 20 TCA1 = (A1)2 MCA1 = 2A1 Source 2: E1 = 20 TCA2 = ½(A2)2 MCA2 = A2 (a) Explain why the marginal benefit to emissions abatement (MBA) is equal to $16. What is the efficient level of abatement for each source? Illustrate in a diagram. [6] A principle in economics is that the marginal cost or marginal abatement and marginal benefit needs to be equal. This means that the cost incurred by society (in forms of environmental impact and economic impact) need to be equal to the marginal benefit incurred by the consumer. The re (b) How would each firm respond to a per unit tax on emissions equal to $t. That is, can you express abatement as a function of the tax? What is the efficient tax? Given the efficient tax, what is the total cost to each source (abatement costs plus taxes paid)? [6] (c) Suppose instead of the tax, a regulator assigns to each source non-transferable permits for 8 units of emissions, how many units of abatement will each firm undertake? Explain, calculate, and illustrate the inefficiency of this policy. [8] (d) Now suppose that the regulator assigns to each firm tradable permits for 8 units of emissions. What would be the equilibrium price of a permit after trade has taken place? What would be the allocation of abatement?
Analyze the risks involved in the foreign-exchange market and create a list of best practices that almost any organization conducting international business would find valuable.
From Part 2 of the scenario, identify whether the copy center is facing a cost-push or demand-pull inflation and provide a rationale for your answer. Suggest a business strategy that would offset the type of inflation you have identified.
question 1sizzling foods inc lsquos partial income statement from is shown below nbspnbspnbsp 2011revenuesrevenue
1. explain the changes in welfare caused by the personal responsibility and work reconciliation act of 1996. 2. to what
the law of comparative advantage recommends that countries specialize in those products in which they have a
Last year the US low-cost-carrier Spirit Airlines entered the Dallas-Chicago market. The average ticket price for all airlines servicing the route fell from $200 to $180. After Spirit's entry, the number of passengers increased from 700 to 800 pe..
The equation QA= 1/2(12-Q)b) is the so called reation function of duopolist A in a COurnot model becasue given the value of Qb, Qa gives the best or profit-maximizing level of sales of oligopolist A. Show that this is the case with reference. Wha..
1. the federal budget deficit has been over 30 percent of gdp since the early 1980s.atruebfalse2. to finance a federal
Regulations for the banking and financial industries have existed in the United States since the beginning of our country. Give a brief overview f the history of these regulations, focusing mostly on the great depression years of the 1930's.
give the definitions for marginal rate of substitution mrs and the price ratio. then explain them in your own words
Suppose that technophiles are willing to pay $400 now for the latest iPhone, but only $300 if they have to wait a year. Normal people are willing to pay $250, and their desire to purchase does not vary with time. Ignore the time value of money a..
Is a high degree of market concentration a boon or threat to consumers? Explain. Use either the allocative efficiency or dynamic efficiency arguments.
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