Question

Question 5 (1 point) There are three polluting sources with the following functions: MAC1 100 4E1, MAC280 - 2E2 and MAC3 60-0.5E3. Suppose that, at the socially-efficient emissions level, MACT $10. What is the socially-efficient level of emissions? Question 6 (1 point) There are three polluting sources with the following functions: MAC1 100 4E1, MAC280 - 2E2 and MAC3 60- 0.5E3. Suppose that, at the socially-efficient emissions level, MACT $10. What is the total abatement cost? Question 7 (1 point) What is the MAC of the 40th unit of abatement? Don't forget the dollar sign. МАС 100 MAC-100-2E 50 Question 8 (1 point) Consider the figure below. What is the dollar value of the total social benefit of reducing emissions from the unregulated quantity to the socially-efficient quantity? Include the dollar sign, don't leave any spaces in your answer and include two decimal places even if your answer is an even dollar amount. S60 $50 АС s30 250 1,000 SO2 emissions (tons)

Answer 1

(Question 5)

Socially efficient emission level is achieved when MAC1 = MAC2 = MAC3 = MACT

When MAC1 = MACT,

100 - 4E1 = 10

4E1 = 90

E1 = 22.5

When MAC2 = MACT,

80 - 2E2 = 10

2E2 = 70

E2 = 35

When MAC3 = MACT,

60 - 0.5E3 = 10

0.5E3 = 50

E3 = 100

Total emission = E1 + E2 + E3 = 22.5 + 35 + 100 = 157.5

NOTE: As per Answering Policy, 1st question is answered.