1 under a strict command and control framework suppose

Assignment Help Microeconomics

Reference no: EM13378018

1) Under a strict command and control framework, suppose abatement standards are set equally across polluters. Assume the total abatement target is set at 30 units. Show the cost implications using three graphs, each of a different polluter with a unique MAC curve drawn to depict a "low cost abater," a "moderate cost abater," and a "high cost abater." On each graph, identify the abatement level corresponding to a uniform standards approach. and show the level of MAC at that point and the area corresponding to TAC.

2) It is well documented that carbon monoxide (CO) emissions from combustible engines increase in colder climates. This in turn implies that damages are expected to be less severe in summer months than in winter. Nonetheless, air quality control authorities use a standard for CO that is uniform throughout the year with no allowance for seasonal effects. Use this information and the following model to answer the questions below.

MSB of CO abatement in winter = 350 - 0.5A;

MSB of CO abatement in summer = 140- 0.2A;

MSC of CO abatement = 0.2A,

where A is the level of CO abatement

a. Graph the MSB and MSC functions on the same diagram.

b. Assume the government sets a uniform standard for winter and summer at A = 500. Support or refute this policy based on the criterion of allocative efficiency, using your model to explain your response.

c. If you were in charge of setting policy for CO emissions, what action would you recommend to assure an allocatively efficient outcome across the two seasons?

3) Assume that two power plants, Firm 1 and Firm 2 release sulfur dioxide (SO2) in a small urban community that exceeds the emissions standard.To meet the standard, 30 units of SO2 must be abated in total. The two firms face the following abatement costs:

MAC1=16+0.5 A1, MAC2=10+2.5 A2 where costs are measured in thousands of dollars.

a. Prove that a uniform standard will not meet the cost effectiveness criterion.
b. Determine how the abatement levels should be reallocated across the two firms to minimize costs.

Reference no: EM13378018

Questions Cloud

The supply curve for product x is given by qxs -340 10px : the supply curve for product x is given by qxs -340 10px .a. find the inverse supply curve.p qb. how much surplus

If two people have cardinal utility functions person1 is : if two people have cardinal utility functions person1 is utility xy and person2 is utility xy13 which bundle would

Brry earns 20 an hour for up to 40 hours of work per week : barry earns 20 an hour for up to 40 hours of work per week. he is paid 30 an hour for every hour of work in excess of

Consider the isle of lucy a country initially characterized : consider the isle of lucy a country initially characterized by government regulations that require detailed reporting

1 under a strict command and control framework suppose : 1 under a strict command and control framework suppose abatement standards are set equally across polluters. assume the

Cross-hauling is the practice of trading the same commodity : cross-hauling is the practice of trading the same commodity in both directions between two countries. for example if

In a complex assembly operation it is found that the : in a complex assembly operation it is found that the learning curve rate is 70. the standard time of 3 minutes per

Assume thata the us is relatively capital abundantb india : assume thata. the u.s. is relatively capital abundant.b. india is relatively abundant in skilled labor.c. tractors

1national saving refers toa disposable income minus : 1.national saving refers toa disposable income minus consumption.b taxes minus government spending.c income minus

User Account

All Pages