Homework Answers
Correct Answer:
D
When permits are traded, then it benefits both the firms in a way that seller firm earns rewards for polluting less, and buyer firm saves money that could be high cost of modernization of machines. So, it benefits both the buyers and sellers firms.
Further, the total pollution emitted, remains same that is allowed by the permits given to these firms. So, total amount of pollution remains same as per the allowed permit and it does not change.
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When one firm sells its pollution permit to another firm, a. both firms benefit. 0 b....
Under a tradeable permit system, when one firm sells its pollution permit to another firm, the...
Under a tradeable permit system, when one firm sells its pollution permit to another firm, the total amount of pollution remains the same. the total amount of pollution decreases. the total amount of pollution increases. O Both a and b are correct. both firms benefit.
Suppose the government wants to reduce the total pollution emitted by three firms in its area
Suppose the government wants to reduce the total pollution emitted by three firms in its area. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. The government wants to reduce total pollution in the area to 6 units. In order to do so the government can choose between two methods: Under method 1, the governments sets pollution standards, whereas under method 2, the government allocated tradable pollution permits, Let’s compare...
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...
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,...
Suppose the government wants to reduce the total pollution emitted by three firms In Rs brea....
Suppose the government wants to reduce the total pollution emitted by three firms In Rs brea. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. The government wants to reduce total pollution in the area to 6 units. In order to do so, the goverment can choose between the following two methods. Method 1: The government sets pollution standards. Method 2: The government allocates tradable pollution permits. Compare the two...
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...
Possible Solutions Total Cost of eliminating 2 units of pollution The options for the first fill in the blank (Firm X) are: $295, $120, $215, $320. The options for the second fill in the blank (Firm...
Possible Solutions
Total Cost of eliminating 2 units of
pollution
The options for the first fill in the blank (Firm X) are: $295,
$120, $215, $320.
The options for the second fill in the blank (Firm Y) are:
$1250, $800, $1850, $1500
The options for the third fill in the blank (Firm Z) are: $180,
$250, $230, $100
The options for the forth fill in the blank are: $1490, $2420,
$1625, $1645
Firm X
Firm Y
Firm Z
Initial pollution...
5. Correcting for negative externalities - Regulation versus tradable permit Suppose the government wants to reduce...
5. Correcting for negative externalities - Regulation versus tradable permit Suppose the government wants to reduce the total pollution omitted 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...
Under a tradeable permit system, when one firm sells its pollution permit to another firm, the total amount of pollution remains the same. the total amount of pollution decreases. the total amount of pollution increases. O Both a and b are correct. both firms benefit.
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. 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 firms In Rs brea. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. The government wants to reduce total pollution in the area to 6 units. In order to do so, the goverment can choose between the following two methods. Method 1: The government sets pollution standards. Method 2: The government allocates tradable pollution permits. Compare the two...
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...
Possible Solutions
Total Cost of eliminating 2 units of
pollution
The options for the first fill in the blank (Firm X) are: $295,
$120, $215, $320.
The options for the second fill in the blank (Firm Y) are:
$1250, $800, $1850, $1500
The options for the third fill in the blank (Firm Z) are: $180,
$250, $230, $100
The options for the forth fill in the blank are: $1490, $2420,
$1625, $1645
Firm X
Firm Y
Firm Z
Initial pollution...
5. Correcting for negative externalities - Regulation versus tradable permit Suppose the government wants to reduce the total pollution omitted 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...
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