Question

Figure: City with Two Polluters Marginal benefit to individual producer $1,100 1,000MB 900 800 700 600 500 MB 400 300 200 100 1,000 1,400 1,800 2,200 Quantity of pollution emissions (tons) 200 600 5. (Figure: City with Two Polluters) Look at the figure City with Two Polluters. If the govermment imposed an emissions tax of $400, firm A would produce produce A) 200; 400 B) 400; 1,200 C) 800; 1,400 D) 1,200; 1,600 , tons of emissions and firm B would . tons of emissions 6. (Figure: City with Two Polluters) Look at the figure City with Two Polluters. If the government issued licenses to pollute a total of 1,600 tons of emissions, the market price to emit 1 ton of emissions would cqual A) $100 B) $200 C) $300 D) $400 7. (Figure: City with Two Polluters) Look at the figure City with Two Polluters. If the government wants to limit total pollution to 2,200 tons, it could impose an emissions tax of. A) $100 B) $200 C) $300 D) $400 on both firms

Answer 1

5. If the government imposed an emission tax of $400, firm A would produce 400 tons of emission and firm B would produce 1200 tons of emission.

• (B.) 400; 1,200

6. If the government issued licenses to pollute a total of 1,600 tons of emissions, the market price to emit 1 ton of emissions would equal:

• (D.) $400

7. If the government wants to limit total pollution to 2,200 tons, it could impose an emissions tax of $300 on both firms.

• (B.) $300