Homework Answers
Answer 3:
An economist would choose the option of tradeable permits more than reducing pollution using regulation because tradeable permits would allow the firms to exchange permits and firms which have greater pollution generation can buy the permits from another firms which have low pollution generation production processes. Regulation, on the other hand, will impose restrictions on all firms uniformly without taking into consideration their pollution limits. Tradeable permits will move the firms on higher production curves as compared to regulation based on their capacity to produce and generate pollution in the environment.
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3. If given the option to reduce pollution using regulation (equal reduction by each firm) or...
2. What happens to the amount of deadweight loss as a tax increases? Explain and use...
2. What happens to the amount of deadweight loss as a tax increases? Explain and use mels supply/demand diagrams to defend your answer. udDly is 3. If given the option to reduce pollution using regulation (equal reduction by each firm) or tradeable permits (between low and high-cost firms), which would an economist choose? Explain. Price
1. Draw how the burden of the tax is distributed under the following scenarios: a) Inelastic...
1. Draw how the burden of the tax is distributed under the following scenarios: a) Inelastic demand and elastic supply b) Elastic demand and inelastic supply c) Relative elasticities of demand and supply are similar In each diagram, clearly label: equilibrium price before the tax. price paid by buyers after the tax, price received by sellers after the tax, portion of tax burden on consumers, and portion of tax burden on producers. 2. What happens to the amount of deadweight...
Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is...
Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation 2. The government allocates tradable pollution permits. Each firm faces different costs,...
Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units
5. Correcting for negative externalities - Regulation versus tradable permits Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation. 2. The government allocates tradable pollution...
Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each...
Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation. 2. The government allocates tradable pollution permits. Each firm faces different costs, so reducing pollution is...
3. Correcting for negative externalities - Regulation versus tradablepermits Suppose the government wants to reduce the...
3. Correcting for negative externalities - Regulation versus tradablepermits Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation. 2. The government...
Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each...
Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation. 2. The government allocates tradable pollution permits. Each firm faces different costs,...
Joulutet 3. Assume that a firm has the following marginal benefit of pollution (denoted E for...
Joulutet 3. Assume that a firm has the following marginal benefit of pollution (denoted E for emissions, measured in tons): MB=150-5 E e. Now assume that instead the government allocates each firm permits to pollute equal to the total current pollution minus 12 tons, but allows the firms to trade. Which firm will purchase permits and which firm will sell permits? Hint: Notice that total pollution reduction of firm 1 plus firm 2 will be 24 tons. f. How much...
5. Correcting for negative externalities - Regulation versus tradable permits Suppose the government wants to reduce the...
5. Correcting for negative externalities - Regulation versus
tradable permits Suppose the government wants to reduce the total
pollution emitted by three local firms. Currently, each firm is
creating 4 units of pollution in the area, for a total of 12
pollution units. If the government wants to reduce total pollution
in the area to 6 units, it can choose between the following two
methods: Available Methods to Reduce Pollution 1. The government
sets pollution standards using regulation. 2. The...
7. Correcting for negative externalities- Regulation versus tradable permits Suppose the government wants to reduce...
7. Correcting for negative externalities- Regulation versus tradable permits Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation. 2. The government...
2. What happens to the amount of deadweight loss as a tax increases? Explain and use mels supply/demand diagrams to defend your answer. udDly is 3. If given the option to reduce pollution using regulation (equal reduction by each firm) or tradeable permits (between low and high-cost firms), which would an economist choose? Explain. Price
1. Draw how the burden of the tax is distributed under the following scenarios: a) Inelastic demand and elastic supply b) Elastic demand and inelastic supply c) Relative elasticities of demand and supply are similar In each diagram, clearly label: equilibrium price before the tax. price paid by buyers after the tax, price received by sellers after the tax, portion of tax burden on consumers, and portion of tax burden on producers. 2. What happens to the amount of deadweight...
Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation 2. The government allocates tradable pollution permits. Each firm faces different costs,...
3. Correcting for negative externalities - Regulation versus tradablepermits Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation. 2. The government...
Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation. 2. The government allocates tradable pollution permits. Each firm faces different costs,...
Joulutet 3. Assume that a firm has the following marginal benefit of pollution (denoted E for emissions, measured in tons): MB=150-5 E e. Now assume that instead the government allocates each firm permits to pollute equal to the total current pollution minus 12 tons, but allows the firms to trade. Which firm will purchase permits and which firm will sell permits? Hint: Notice that total pollution reduction of firm 1 plus firm 2 will be 24 tons. f. How much...
5. Correcting for negative externalities - Regulation versus
tradable permits Suppose the government wants to reduce the total
pollution emitted by three local firms. Currently, each firm is
creating 4 units of pollution in the area, for a total of 12
pollution units. If the government wants to reduce total pollution
in the area to 6 units, it can choose between the following two
methods: Available Methods to Reduce Pollution 1. The government
sets pollution standards using regulation. 2. The...
7. Correcting for negative externalities- Regulation versus tradable permits Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation. 2. The government...
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