Can someone please work these out so I can check my answers. Thank you! Name ECO
ID: 1139880 • Letter: C
Question
Can someone please work these out so I can check my answers. Thank you!
Name ECO 322 Assignment 2 1. Explain using a graph of the pollution abatement market, a situation in which the allocatively efficient level of abatement occurs at 100% (there would be zero pollution) Use the MSC and MSB curve position to explain this situation 2. Under a strict command and contol framework, suppose abatement standards are set equally across polluters. Assume the total abatement target is 90 units A. Show the cost implications using three graphs, each of a different polluter with a unique MAC curve drawn to depict a low-cost abater, a moderate cost abater, and a high-cost abater B. On each graph identify the abatement level corresponding to a uniform standards approach and show the level of MAC at that point and the area corresponding to the TAC C. Now, refer directly to your model and summarize what would happen qualitatively to the abatement levels of each firm if the equimarginal principal of optimality were used Explain intuitively why this would be cost-effective 3. It is well documented that the carbon monoxide (CO) emissions from combustible engines increases in colder climates. This implies that the associated damages are expected to be less severe in summer months than in winter. Nonetheless, air quality control authorities use a standard for CO that is uniform throughout the year with no allowance for seasonal effects. Use this information and the following model to answer the questions MSB of CO abatement in winter 600 0.75A MSB of CO abatement in summer 200-0.25A MSC of CO abatement0.15A where A is the level of abatement A. Graph the MSB and MSC functions in the same diagram B. Assume the government sets a uniform standard for winter and summer at A-800 Support or refute this policy based on the criterion of allocative efficiency, using your model to explain your response C. If you were in charge of setting policy for CO emissions what action would you recommend to ensure an allocatively efficient outcome across the two seasons? 4. Assume that two power plants, Firm 1 & Firm 2 release sulfur dioxide (SO2) in a small urban community that exceeds the emissions standard. To meet the standard, 50 units of SO2 must be abated in total. The two firms face the following abatement costs MAC1- 25+0.15A MAC 2-1 5+1.5A2 where costs are measured in thousands of dollars A. Prove that uniform standard will not meet the cost effectiveness criterion.Explanation / Answer
1) using a graph of polution abatement market, model a situation where the allocatively efficient level of abatement occur at 100 or equivalently where population is equal to zero.
Refer to yhe relative position of MSC and MSB curves explain such an outcome intuitively.
In this case the MSC and MSB of abatement must interact where abatement equal to 100 ( or alternatively where MSC<MSB at the 100 level) although the MSC is expected to be very high at this point so too is the MSB. since the MSB measure the reduction in damage from abating the contaminant, such as solution implies that the population is very harmful for health/ ecology.
Some might argue that such a characterization is appropriate for contamination like PCBs or DDT, which have been banned in the use in U.S.