What is the marginal abatement cost

Assignment Help Econometrics
Reference no: EM13180159

The new mayor has pledged to reduce air pollution, and the only source of air pollution in the city are two cement plants, plant A and plant B. 25 years ago, when plant A was constructed, the cement production technology produced a lot more pollution; it therefore has a pollution abatement cost of 5c3, where c is a unit of pollution. Plant B was constructed 2 months ago; it has a pollution abatement cost of 10c2. Assume that neither plant is initially engaging in pollution abatement. The per unit benefit to a unit of pollution abatement is constant at $1500. Unless told otherwise, assume the plants are owned by different firms.

a) What is the marginal abatement cost for plant A? What is the marginal abatement cost for plant B?

b) What is the socially optimal level of pollution abatement? How is the socially optimal level of abatement split between the two plants?

Reference no: EM13180159

Questions Cloud

How many rectangles can sam make : Sam purchased 1000m2 of material and needed to cut it into rectangles of area 200cm2 for a patchwork quilt. This can be done with no waste. How many rectangles can Sam make.
What is the test value for their claim : In 35 of their stores they sold on the average 430 suits per year with a population standard deviation of 40. What is the test value for their claim?
Compute net income as a percentage of net sales : Compute net income as a percentage of net sales in each year and compute the percentage change in each of the above items from 2010 to 2011. Use a + or - to indicate increase or decrease.
Find the private marginal benefit : Smartphones require superconductors, and the production of superconductors is heavily polluting due to the use of many chemicals in the process. The damages to society are given by Ds = 10x2.a) Find the private marginal benefit, the private margina..
What is the marginal abatement cost : Plant B was constructed 2 months ago; it has a pollution abatement cost of 10c2. Assume that neither plant is initially engaging in pollution abatement. The per unit benefit to a unit of pollution abatement is constant at $1500. Unless told otherw..
Compute the coefficient of determination : )TLC Lawn Care, Inc. provides fertilizer and weed control services to residential customers. Its seasonal services package, regularly priced at $250, includes several chemical spray treatments. As part of an effort to expand its customer base, TLC..
Complete and balance the equation for a reaction : MnO2 is oxidized to MnO4 and Cu2 is reduced to Cu . Complete and balance the equation for this reaction in acidic solution. Phases are optional.
Find the resultant of the complex numbers : Find the resultant (sum) of the complex numbers. Express in rectangular form
Explain what is the total volume of the mixture : with a density of 3.00 g/mL is mixed with a 50.0 mL sample of a pure liquid, liquid B with a density of 2.00 g/mL. What is the total volume of the mixture

Reviews

Write a Review

Econometrics Questions & Answers

  Determine equations to find pw of each machine

Determine the proper equations to find PW of each machine. The cost of money is 10% per year. Machine X         Machine Y Initial cost, $   -55,000  -46,000 Annual cost, $/year   -10,000 -15,000

  Reduction in tax rates increase governments tax receipts

Use a Keynesian 45-degree diagram to show the effect of an increase in government spending and how could a reduction in tax rates increase government's tax receipts?

  Determine the unemployement rate

This year 200 workers will lose their jobs, 170 workers will return to the labor force after an absence 1100 workers will voluntaryly leave their jobs, and 50 new workers will enter the labor force. At the same time 726 workers will find jobs, and ..

  Explanation of multiple regression

A company's marketing dept. obtained information from 10 of the firm's outlets. The information consists of the qty. and price of the products sold at each outlet from the distribution center.

  What is the steady state level of capital

In the derivation of the Solow growth model, we assumed that government spending and taxes less transfers were both zero. Relax that assumption and assume that both are constant graction of GDP, say T = G = gammaY. What is the steady state level o..

  Compute the amount of each of the 12 payments

A person arranges to repay a a$1000 bank loan in 10 equal payments at a 10% annual interest rate. Immediately after his third payment he borrows $500, also at 10% annual interest rate. When he borrows the $500, he talks the banker into letting him..

  What are the marginal abatement cost functions

What are the marginal abatement cost functions for each of the two areas? Calculate the loss in the two areas due to over-control (for the rural area) and under-control (for the urban area).

  Determine the decision variables

A and 20 milligrams of vitamin B while minimizing cost. An ounce of oats contributes 8.5 milligrams of vitamin A and 1.2 milligram of vitamin B, whereas an ounce of rice contributes 6.4 milligrams of A and 2.2 milligrams of B. An ounce of oats cos..

  How much money would be needed to forever pay

The group recently spent $100,000 to plant the gardens. The members want to set up a perpetual fund to provide $100,000 for future replantings of the gardens every 10 years. If interest is 5%, how much money would be needed to forever pay the cost..

  What are the equlibrium quantities

Consider a perfectly competitive market with 10 firms; Firm 1, Firm 2...Firm 10. Firm 1 through Firm 9 have the same cost function given by C(qi)=2q^2, where q is the quantity produced by firm i. Firm 10 has a different cost function C(q10)= 3q^2..

  What was the capital gain value

In 1984, Walt Disney brought in Michael Eisner, a Paramount executive as CEO. The firm's board of directors agreed to pay Eisner a salary of $750,000 plus a $750,000 bonus for signing on, plus an annual bonus equal to 2 percent of the dollar amoun..

  Forecasting services

When disparities exist from census information, housing starts data and other research data when seeking for information to help with predicting the power tool market

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