The marginal damage averted from pollution cleanup is MD = 200 5Q. The marginal cost associated

Question:

The marginal damage averted from pollution cleanup is MD = 200 − 5Q. The marginal cost associated with pollution cleanup is MC = 25 + 2Q.

a. What is the optimal level of pollution reduction?

b. Show that this level of pollution reduction could be accomplished through taxation. What tax per unit would generate the optimal amount of pollution reduction?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Public Finance And Public Policy

ISBN: 9781319105259

6th Edition

Authors: Jonathan Gruber

See More Books

Question Posted: Mar 17, 2024 06:00 AM

See More Questions

The marginal damage averted from pollution cleanup is MD = 200 5Q. The marginal cost associated with pollution cleanup is MC = 10 + Q. a. What is the optimal level of pollution reduction? b. Show...
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
Pollution that increases firm costs-Policy Solutions: This exercise continues to build on exercises 21.9 and 21.10. Assume the same basic setup of firms located around a lake producing pollution that...
Show the income statement, cash flow statement and balance sheet of the company at 31/12/2020 if: 1. The company start its operations on June 1st, 2020. Over the period, it sells 50 laptop for $400....
Could a project's MIRR ever exceed its IRR?
When might a company use budgeted costs rather than actual costs to compute direct labour rates? LO1
Operation costing, equivalent units. (Chapter Appendix II, CMA, adapted) Gregg Industries manufactures a variety of plastic products, including a series of moulded chairs. The three models ofmoulded...
Dreiling Company borrowed $300,000 on January 1, 2017, by issuing a $300,000, 8% mortgage note payable. The terms call for annual installment payments of $40,000 on December 31. Instructions (a)...
Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to five separate activity pools. The...
Two firms are ordered by the federal government to reduce their pollution levels. Firm As marginal costs associated with pollution reduction is MC = 150 + 3Q. Firm Bs marginal costs associated with...
The private marginal benefit associated with a products consumption is PMB = 350 4Q and the private marginal cost associated with its production is PMC = 6Q. Furthermore, the marginal external...
Find the derivative of the function using the definition of derivative. State the domain of the function and the domain of its derivative. f(x) = x 4
A flat sheet is in the shape of a rectangle with sides of lengths 0.400 m and 0.600 m. The sheet is immersed in a uniform electric field of magnitude 85.0 N/C that is directed at 20 from the plane of...
You are a new BCBA working for a therapeutic day school that serves individuals with disabilities from ages 5 through 21. Each classroom has 1 special education teacher, 1 behavior therapist (BT) and...
Mountain Sports, Inc., is a retailer that has engaged you to assist in the preparation of its financial statements at December 31, 2021. Following are the correct adjusted account balances, in...
(a) sint 1-cost (b) Please note each question has 4 options: (a), (b), (c) and (d). 1. Given x = t - sint and y = 1 - cost, then dy 1-cost t-sint = 1-cost sint sint cost-1 2. Given sin x cos y - 2 =...
Sometimes I forget a few items when I leave the house in the morning. For example, here are probabilities that I forget various pieces of footwear: left sock 0.2 right sock 0.1 left shoe 0.1 right...
Let X (t) be a random process whose PSD is shown in the accompanying figure. A new process is formed by multiplying by a carrier to produce X (t), Y (t) = X (t) cos( Ïot + Î¸) Where...
Why did management adopt the new plan even though it provides a smaller expected number of exposures than the original plan recommended by the original linear programming model?
Suppose that you can earn $16 per hour before taxes and can work up to 80 hours per week. Consider two income tax rates, 10% and 20%. a. On the same diagram, draw the two weekly consumptionleisure...
Suppose that the government introduces an EITC such that for the first $8,000 in earnings, the government pays 50 per dollar on wages earned. For the next $3,000 of earnings, the credit is held...
Congressman Pinkie proposes reducing the tax exemption for children in married families where only one parent works outside the home. Why would this proposal improve equity, from a Haig-Simons...
Long-term liabilities are shown in two places in the business firm's balance sheet depending upon when the long-term liabilities are scheduled for payment. True False
Julio is single with 1 withholding allowance. He earned $1,025.00 during the most recent semimonthly pay period. He needs to decide between contributing 3% and $30 to his 401(k) plan. If he chooses...
Acquirer firm plans to launch a takeover of Target firm. The manager of Acquirer indicates that the deal will increase the free cash flow of the combined business by $13.6m per year forever. The beta...

The marginal damage averted from pollution cleanup is MD = 200 5Q. The marginal cost associated

Question:

Step by Step Answer:

a To find the optimal level of pollution reduction we need to equate the marginal damage averted MD ...View the full answer

Public Finance And Public Policy

Students also viewed these Business questions