Imagine a firm knows it is going to be subsidized to reduce pollution from current levels....
Imagine a firm knows it is going to be subsidized to reduce pollution from current levels. How does this change incentives to pollute today for the firm? How can the regulator police this behavior?
Homework Answers
When the firm is aware that it will be subsidized for reducing pollution from current levels, it will start increasing its pollution levels so as to get more subsidies and make profits.
The regulator can police this behavior by inspecting past pollution levels and analyzing whether the firm has increased its pollution level after hearing about the news or whether it is actually genuine or not. The firm can then be penalized in case of fraud observed.
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Imagine a firm knows it is going to be subsidized to reduce
pollution from current levels....
8. By how many pounds will the firm choose to reduce its pollution? 9. If Firm...
8.
By how many pounds will the firm choose to reduce its pollution?
9. If Firm A reduces its pollutants from 700 units to 570
units, how many permits does it sell after one year?
- 3 days 3/ Question 8 In the graph below, the solid purple line represents the marginal cost of reducing particle emissions (measured in pounds) for a firm. The dashed line represents a newly imposed pollution charge of $350 for every pound of pollution emitted....
Assume that a firm has the following marginal benefit of pollution (denoted E for emissions, measured...
Assume that a firm has the following marginal benefit of pollution (denoted E for emissions, measured in tons): MB=150-5E Q: How much would this firm pollute if pollution is unregulated? The government would like to reduce pollution from this amount by 12 tons and so implements a quantity constraint at the quantity in part (a) minus 12. What is the cost to this firm of reducing pollution by 12 tons? What tax would encourage this polluter to reduce pollution by...
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...
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 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,...
1) (25 points) A firm is considering adopting a new pollution abatement technology. Assume that i...
1) (25 points) A firm is considering adopting a new pollution abatement technology. Assume that its current marginal abatement cost function with its existing technology is If it adopts the new technology, its new marginal abatement cost function will be MACN-4-0.5E a) Imagine the government imposes a $2 tax on emissions. What level of emissions does the firm choose if it does not adopt the new technology? How much does the firm pay in taxes? What are the firm's total...
Please examine past and/or current social marketing campaigns and see if you can remember one from...
Please examine past and/or current social marketing campaigns and see if you can remember one from your childhood that had a big effect on you. Locate a social marketing campaign or public service announcement that addresses a public health issue (does not need to be current – for example, the “This is your brain, this is your brain on drugs” campaign). Briefly describe the issue and campaign. Provide a link to a video clip, if appropriate and available. Is the...
1. Consider a risk-neutral firm that operates for two periods with a production function that depends...
1. Consider a risk-neutral firm that operates for two periods with a production function that depends only on the amount of labor hired: f(L) = 100L 1/2 . Assume that the interest rate (r) is equal to 5%. The wage in the first period is equal to $10 per hour, but the second period’s wage is either $10 (with probability 0.4) or $20 (with probability 0.6). The current price for the firm’s output is P 0 =$20. In the second...
ENSC 102 . Problem Set #6 Due at the beginning of class on Wednesday, May 22 Answer each of the following questions in your own words and using your ow calculations. For worked problens remembe...
ENSC 102 . Problem Set #6 Due at the beginning of class on Wednesday, May 22 Answer each of the following questions in your own words and using your ow calculations. For worked problens remember to explain any intermediate steps or assumptions, show all units, and box your final anwers. For ful possible credit, make sure your fintished work is legible, prepared on loose-leaf paper, and shows your name and your lab instructorname at the top of the first page...
Assignment : Imagine that a friend who knows you are working toward your degree in business...
Assignment : Imagine that a friend who knows you are working toward your degree in business administration is complaining about interest rates. Perhaps they think the rate they are getting on savings vehicles, like money markets, is too low, or the interest they are paying on their mortgage is too high. They conclude that it seems like no matter what they lose. 1) Respond to your friend's concerns. Be sure to be specific in supporting the points you are making...
8.
By how many pounds will the firm choose to reduce its pollution?
9. If Firm A reduces its pollutants from 700 units to 570
units, how many permits does it sell after one year?
- 3 days 3/ Question 8 In the graph below, the solid purple line represents the marginal cost of reducing particle emissions (measured in pounds) for a firm. The dashed line represents a newly imposed pollution charge of $350 for every pound of pollution emitted....
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...
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,...
1) (25 points) A firm is considering adopting a new pollution abatement technology. Assume that its current marginal abatement cost function with its existing technology is If it adopts the new technology, its new marginal abatement cost function will be MACN-4-0.5E a) Imagine the government imposes a $2 tax on emissions. What level of emissions does the firm choose if it does not adopt the new technology? How much does the firm pay in taxes? What are the firm's total...
ENSC 102 . Problem Set #6 Due at the beginning of class on Wednesday, May 22 Answer each of the following questions in your own words and using your ow calculations. For worked problens remember to explain any intermediate steps or assumptions, show all units, and box your final anwers. For ful possible credit, make sure your fintished work is legible, prepared on loose-leaf paper, and shows your name and your lab instructorname at the top of the first page...
Assignment : Imagine that a friend who knows you are working toward your degree in business administration is complaining about interest rates. Perhaps they think the rate they are getting on savings vehicles, like money markets, is too low, or the interest they are paying on their mortgage is too high. They conclude that it seems like no matter what they lose. 1) Respond to your friend's concerns. Be sure to be specific in supporting the points you are making...
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