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Write a short 200 word essay to answer each of the following questions using a adequate diagrams/documentation as necessary: Monopolies and cartels are usually associated with economic inefficiencies and dead weight losses. With a common-pool resource, on the other hand, asset values are non-existent and resources are depleted more quickly than would be optimal (suggesting very high implicit discount rates). How might the output quotas of an international cartel, like OPEC, affect resource conservation and the speed of depletion?European countries have relied to a much greater extent on emission charges than the United States has, which seems to moving toward a greater reliance on transferrable emission permits. From an efficiency point of view, should the United States follow Europe's lead and shift its emphasis toward emission charges? Why or why not?Why does a fuel tax reduce oil consumption more than higher fuel efficiency standards? Should gas taxes be higher? How many kg of CO2 would you emit travelling 250 km by conventional gas powered car?Part II1. There are only two polluting sources in the region, each of which generates 10 units of pollution for a total of 20 units released into the environment. The government determines that emissions must be reduced by 10 units across the region to achieve the "socially desirable level of pollution". Each firm faces different abatement cost conditions modeled as follows:Polluter 1:Marginal Control Cost: MCC1 = 2.5Q1Total Control Cost: TCC1 = 1.25(Q1)²Polluter 2: Marginal Control Cost: MCC2 = 0.625Q2Total Control Cost: TCC1 = 0.3125(Q2)²Where Q1 is the amount of pollution controlled (abated) by Polluter 1, and Q2 is the amount of pollution controlled (abated) by Polluter 2.a) What is the cost effective abatement allocation across polluting sources? What is the total cost to achieve this goal?b) Assume that the government implements the 10-units standard uniformly, requiring each polluter to abate by 5 units. What is the total cost to achieve this goal? Is it more / less than the total cost from part a)? Comment on your findings.c) Now assume that the government imposes emission charge set at $4 for each polluter. Show how each firm responses to tax. Does $4 unit tax achieve the 10-unit abatement standard?d) Government finally decides to issue permits rather than impose tax. It issues 10 permits, each of which allows the bearer to emit 1 unit of pollution. The government allocates 5 permits to each polluter. (d.i) If the permits system does not allow for trading, what would be each firm's response - cost, abatement required to this allocation?(d.ii) Assume now that trading is allowed and that two firms agree on the purchase and sale of permit at a price of $8.00. What would be each firm's response - cost, abatement required, revenue to this price?(d.iii) Does the outcome from part (ii) represent the cost effective solution? If yes - why? If not, describe what happens next.e) Compare and contrast outcomes from part b) - d). Which instrument would you recommend to government to achieve goal of emission reduction by 10 units?2. Suppose the marginal benefits (social and private) and costs (social and private) per gallon of gasoline in Canada are modeled as follows to illustrate the negative externality of gasoline combustion:MSB = 12.80 - 0.42QMPB = 12.80 - 0.4QMSC = MPC = 1.25 + 0.02Q(where Q is millions of gallons)a) State the equation that represents the market externality. Give the economic interpretation of this equation, using its specific numerical value(s).b) Find the efficient equilibrium, PE and QE, for this market. (Do not round)c) Find the dollar value of a per-unit gasoline tax that would achieve the efficient solution, and calculate the tax revenues generated to the government as result.
Find the equilibrium price, quantity and revenue in a market characterized and Find Betty's opportunity cost of a bottle of wine in terms of box(es) of chocolates.
An increaseing governemtn expenditure in increasing GDP when it is financed by rasing taxes or slling government bonds to the general public or else.
Describe the difference between a monopoly and an oligopoly, and a cartel and provide an example of the monopoly, an oligopoly, and a cartel and write down the welfare effects of monopolies and oligopolies.
Research how externalities impacted the development of communication infrastructure- both positively and negatively and discusses a positive example of externality associated with the development of communication infrastructure and Explain why?
Suppose an economy of two firms and two consumers. The two firms pollute. Firm 1 has a marginal savings function of MS1(e) = 5-e where e is the quantity of emissions from the firm.
Speedy delivery is the package carrier which serves the Midwest It specializes in the delivery of auto parts to independent auto repair shops. It competes against very large firms like FedEx, UPS, and US Postal.
Why is the pricing of a Gillette safety razor a form of two-part tariff Must Gillette be a monopoly producer of its blades as well as its razors Suppose you were advising Gillette on how to determine the two parts of the tariff.
Assume there is an imperfect capital market. Draw a graph to show the optimal years of schooling for an individual with high access to funds but of low ability and an individual with low access to funds but with a higher ability level. Which ind..
Listen carefully to the following video and summarize the main points that he is making and to what extent is it related to Adam Smith's invisible hand
When a employee declares that he consider to quit, say next month, the threat of being fired has no bite. The employee may find it in his interest to shirk.
Company M and N compete for market and decide independently how much to advertise. Every one can expend either $10 million or $20 million on advertising.
A recent book was titled the end of management. Suppose the technology evolves in such a way that a high percentage of employees do not work in the company office. They telecommute or work offline. What then Is the role of management Is there one,..
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