Reference no: EM13694592
Question 2: Assume the marginal savings from emissions for an industry are given by MS(e) = 30 – e and that the marginal damage from emissions is given by MD(e) = e. Plot marginal damage and marginal savings from emissions for this industry. What is the efficient level of an emission tax? What is the optimal level of pollution abatement? Derive this result graphically.
Question 3: Assume and economy of two firms and two consumers. The two firms pollute. Firm one has a marginal savings function of MS1(e) = 5 - e, where e is the quantity of emissions from the firm. Firm two has a marginal savings function of MS2(e) = 8 – 2e. Each of the two consumers has marginal damage MD(e) = e, where e in this case is the total amount of emissions the consumer is exposed to.
3.1. Graph the firm-level and aggregate marginal savings functions.
3.2. Graph the aggregate marginal damage function. 3.3. [15points] What is the optimal level of pollution, the appropriate Pigovian fee, and emissions from each firm?
Question 4: An ice-cream factory produces output at C = q 2 , where q is the quantity of ice-creams produced, in tons. In addition, 2 units of emissions are produced for each ton of icecreams (e = 2q). Pollution damage is $2 for each unit of emissions, which leads the government to charge $2 per unit of emissions as a Pigovian fee. The firm's output sells competitively for $10 per ton.
4.1. How many tons of ice-creams will the factory produce? How much does it pay in emission fees?
What are its profits?
4.2. A device is invented that would reduce the firm's emissions to one unit for each town of output (e = q). How much would the firm be willing to pay for such a device?
|
Higher the price of oil will be in next world oil shortage
: “The more oil the US imports, the higher the price of oil will be in the next world oil shortage or crisis.” “The growing exports of off-season fruit from Chile, which now accounts for 80% of the US supply of such produce as winter grapes, are contri..
|
|
Differences provide a rationale for anti-trust legislation
: How does the price and level of output for a monopolist differ from that of a purely competitive firm? Is this due to differences in the cost of doing business? Do these differences provide a rationale for anti-trust legislation? Explain.
|
|
How large an investment in the automation project
: A hospital would replace five personnel that currently cover three shifts per day. 365 days per year. Each person earns $35,000 per year. Company-paid benefits and overhead are 45% of wages. Money costs 8% after income taxes.
|
|
Negotiation between management labor concerning labor wages
: Suppose you have a negotiation between management an labor concerning labor wages. Management and labor do well when they each do the opposite of what the other does i.e the best situations for both are: (i) for management to bargain hard (offer low ..
|
|
How much would the firm be willing to pay for such a device
: A device is invented that would reduce the firm's emissions to one unit for each town of output (e = q). How much would the firm be willing to pay for such a device?
|
|
Money supply and returning the nation to a gold standard
: Some economists have called for a return to the gold standard (as a reminder, this would mean that every dollar would be backed by a certain amount of gold and, therefore, the money supply would be determined by the amount of gold owned in the countr..
|
|
Compute the before-tax equilibrium price and quantity
: Suppose demand is given by QD = 100 – P and supply QS = P. If sellers pay a tax equal to 10, what is the after-tax supply? Compute the before-tax equilibrium price and quantity, the after-tax equilibrium quantity, and buyer’s price and seller’s price..
|
|
Examples of automatic stabilizers
: Which of the following are examples of automatic stabilizers? Check all that apply.
|
|
The pervasive problem of scarcity means
: The pervasive problem of scarcity means that every society must choose among alternative uses of its limited resources. Society has only so much labor, capital, land and entrepreneurship that can be used to satisfy the unlimited wants of its members.
|