Consider the environmental problem created by two paint companies that release chromium wastes into a nearby...
- Consider the environmental problem created by two paint companies that release chromium wastes into a nearby stream. The state authorities set a standard for the waterway that requires a combined abatement level (A) for chromium of 15 units. Suppose that the two firms, firm 1 and firm 2, face the following marginal abatement cost equations: MAC1= 3.2A1and MAC2= 0.8A2, where costs are measured in thousands of dollars.
- If the state uses a uniform standard, show that such a ruling would not be cost-effective. Which firm should be abating more, and which firm should be abating less?
- Now find the cost-effective solution.
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Consider the environmental problem created by two paint
companies that release chromium wastes into a nearby...
Problem 1 Consider the environmental problem created by two chemical plants that release arsenic into a...
Problem 1 Consider the environmental problem created by two chemical plants that release arsenic into a nearby river. The authorities set a standard for the waterway that requires a total abatement level (A) for arsenic of 16 units. Suppose that the two firms, firm 1 and firm 2, face the following marginal abatement cost equations: MAC1 = 3A1 and MAC2 = A2, where costs are measured in thousands of dollars. If the state uses a uniform standard, show that such...
2. Assume that two power plants, Firm 1 and Firm 2, release sulfur dioxide (SO2) in...
2. Assume that two power plants, Firm 1 and Firm 2, release sulfur dioxide (SO2) in a small urban community that exceeds the emissions standard. To meet the standard, 30 units of SO2 must be abated in total. The two firms face the following abatement costs: MAG-16 + 0.5A1 MAC2-10+2.5A2, where costs are measured in thousands of dollars. a. Prove that a uniform standard will not meet the cost-effectiveness criterion b. Determine how the abatement levels should be reallocated across...
1.) Suppose that the state of Connecticut is attempting to set a water quality standard, where...
1.) Suppose that the state of Connecticut is attempting to set a water quality standard, where water quality is measured as the percent of mercury abated (A), and the marginal social benefit (MSB) of abatement and marginal abatement cost (MAC) have been estimated as follows: MSB = 40 - 0.1A MAC = 36 + 0.025A, The state's department of environmental protection sets the standard at 20 percent. Is this standard set efficiently, too stringently, or too leniently? Explain briefly. (2...
5. Suppose that there is an industry with two firms (1 and 2) with marginal abatement...
5. Suppose that there is an industry with two firms (1 and 2) with marginal abatement cost curves as follows MAC1 1,000 2E1 MAC2 500 E2 E1 and E2 represent the respective emissions of each firm in tonnes [3] (a) Solve for initial emissions for each fim and rewrite both of the MAC equations as functions of abatement [6] (b) Derive the Industry MAC curve for this industry . Briefly explain each of the steps you take to find the...
Suppose that two firms, X and Y, face the following abatement costs: MACX = 1.2AX, MACY =...
Suppose that two firms, X and Y, face the following abatement costs: MACX = 1.2AX, MACY = 0.3AY TACX = 0.6AX2 TACY = 0.15AY2 Further assume that the combined abatement standard is 40 units for both firms. Based on the model given, the cost-effective solution would arise if each firm abates 20 units of pollution firm X abates 8 units, and firm Y abates 32 units firm Y does all the abating because its MAC is lower firm X abates 24...
Question 3 Assume that there are two firms, each emitting 40 units of pollutants into the...
Question 3 Assume that there are two firms, each emitting 40 units of pollutants into the environment, for a total of 80 units in their region. The government sets an aggregate abatement standard (AST) of 30 units (total in the region). The polluters' cost functions are as follows, where the dollar values are in thousands: Polluter 1: TAC1 = 15 + 1.5(A1)2, MAC1 = 3A1. Polluter 2: TAC2 = 16 + 0.55(A2)2, MAC2 = 1.1A2, a) What information does the...
Problem 1 Assume that there are two factories, each emitting 20 units of pollutants into the...
Problem 1 Assume that there are two factories, each emitting 20 units of pollutants into the environment, for a total of 40 units in their region. The government sets an aggregate abatement standard (AST) of 20 units. The polluters' cost functions are as follows, where the dollar values are in thousands: Polluter 1: TAC1 = 20 + 0.75(A1)2, Polluter 2: TAC2 = 15 + 0.5(A2)2, MAC1 = 1.5A1, MAC2 = A2. What information does the government need to...
3. Two companies Toxic Wastes Management and Sludge Industries both pollute a nearby lake Each firm...
3. Two companies Toxic Wastes Management and Sludge Industries both pollute a nearby lake Each firm dumps 1,000 gallons of goo every day into the lake. As a consequence the lake has lost its clarity and the fish are dying. Local residents want to see the lake restored. Toxic Waste's production process depends heavily on being able to dump the goo into the lake. It would cost the Toxic Waste $10 per gallon to clean up the goo it creates....
Q.4. (45 Points) Suppose that under the Michigan’s voluntary emission trading program, the object...
Q.4. (45 Points) Suppose that under the Michigan’s voluntary emission trading program, the objective for the two major firms in an urban area is a 50 percent reduction in carbon monoxide (CO) emissions from 120 units to 60 units. Each firm face the following costs: Firm 1: TAC1=2000+0.6(A1) 2 MAC1=1.2A1 Firm 2: TAC2=1000+0.2(A2) 2 MAC2=0.4A2, where A1 and A2 represent the percentages of CO emission abatement achieved by Firm 1 and Firm 2, respectively, and TAC and MAC are measured...
Consider two firms (i.e., firms 1 & 2) with heterogeneous marginal abatement cost functions: MAC1=12 -...
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2. Assume that two power plants, Firm 1 and Firm 2, release sulfur dioxide (SO2) in a small urban community that exceeds the emissions standard. To meet the standard, 30 units of SO2 must be abated in total. The two firms face the following abatement costs: MAG-16 + 0.5A1 MAC2-10+2.5A2, where costs are measured in thousands of dollars. a. Prove that a uniform standard will not meet the cost-effectiveness criterion b. Determine how the abatement levels should be reallocated across...
1.) Suppose that the state of Connecticut is attempting to set a water quality standard, where water quality is measured as the percent of mercury abated (A), and the marginal social benefit (MSB) of abatement and marginal abatement cost (MAC) have been estimated as follows: MSB = 40 - 0.1A MAC = 36 + 0.025A, The state's department of environmental protection sets the standard at 20 percent. Is this standard set efficiently, too stringently, or too leniently? Explain briefly. (2...
5. Suppose that there is an industry with two firms (1 and 2) with marginal abatement cost curves as follows MAC1 1,000 2E1 MAC2 500 E2 E1 and E2 represent the respective emissions of each firm in tonnes [3] (a) Solve for initial emissions for each fim and rewrite both of the MAC equations as functions of abatement [6] (b) Derive the Industry MAC curve for this industry . Briefly explain each of the steps you take to find the...
3. Two companies Toxic Wastes Management and Sludge Industries both pollute a nearby lake Each firm dumps 1,000 gallons of goo every day into the lake. As a consequence the lake has lost its clarity and the fish are dying. Local residents want to see the lake restored. Toxic Waste's production process depends heavily on being able to dump the goo into the lake. It would cost the Toxic Waste $10 per gallon to clean up the goo it creates....
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