Repeat exercise 12.1, but now use for the domestic utility function, and a corresponding expression for the

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Repeat exercise 12.1, but now use

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for the domestic utility function, and a corresponding expression for the foreign utility function.

(a) What are the maximum consumption levels for z and z_f?

(b) Assume now that pollution is proportional to consumption so that e=φz and e_f=φ _fz_f. Repeat (a) through (d) in exercise 12.1, adjusting the utility function for (d) accordingly.

Data from exercise 12.1

Consider the model from section 12.1, where the countries’ utility functions are:

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A Course In Environmental Economics

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Repeat exercise 12.1, but now use for the domestic utility function, and a corresponding expression for the

Question:

b U(z.E.E)= az-a- az-a-1-27 -E

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It seems that there is some critical information missing from your question particularly the domestic utility function you refer to However we can sti...View the full answer

A Course In Environmental Economics

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