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Consider the case of a single polluter and regulator. The regulator knows the marginal benefit of pollution abatement (equivalent to saying the regulator knows the marginal damage from pollution) but he does not know the marginal cost of pollution abatement for the firm. If the regulator proposes to implement a fee on pollution and asks the polluter to reveal the marginal cost of abatement, discuss how the polluter will respond and type of outcome that would result.
Alternatively, if the regulator proposes to give away free permits what would happen?
What if the regulator announces a coin flip will decide whether the policy will be fees or free permits.
Johnston production is the price taker which utilizes this cost structure in the short run:
The salvage value is expected to be $150,000 at anytime you sell the machine for the next several years. Your MARR is 10%. What is the optimum economic life you predict for the machine?
Show that if oil is produced from two reservoirs, one with high marginal cost and one with low marginal cost, it is not possible for the Hotelling rule to be satisfied for each reservoir simultaneously. Give two reasons that oil might be produced ..
Using Minitab estimate the expected value of its profits and standard deviation of profits and calculate the expected value of returns of stock A & B
Event 1: The wages for all dental assistants increase, increasing the costs of inputs. Event 2: The government provides national dental insurance benefits for all U.S. citizens that cover 100% of the cost of all dental services. There are two effe..
Determine the optimal size of the shopping center (to the nearest 100 square meters) based on existing estimates of the demand for retail space.
HP provided AAA with sophisticated equipment and reliable repair service, for several years. AAA returned a failed piece of equipment. A meeting was held which included Juanito Rios, AAA's representative; Sonia Martinez
differentiate between positive and negative feedback loops. give examples of each with regard to natural resource
Using regression analysis, find an equation that best fits the data to represent the TVC function and at what sales/output level will marginal costs (MC) reach a minimum?
Use a supply and demand diagram to illustrate the following conditions a. Cost -push inflation caused by a labor union successfully negotiating for a higher wage. b. Demand-pull inflation caused by an increase in demand for domestic products from for..
Then the materials cost for each structure was $25,000 and the cost capacity factor is 0.65. Cost index values for 1999 and 2011 are 200 and 289 respectively. The estimated manufacturing cost for the first 1,000 square foot structure is $12,000. U..
Assume that the firm buys a machine for each worker that increases the marginal productivity of each worker, which would be reflected by an increase in the total product, marginal product, and value of marginal product columns.
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