In a seminal paper, Martin Weitzman derived a simple rule for when pol- icymakers should prefer a tax vs cap-and-trade in the face of uncertain abatement costs. What is the rule? 1.2 Draw two graphs demonstrating this result. Assume that marginal benefits are known (ie certain), but marginal costs end up being LOWER than expected. Draw one graph where a quantity instrument performs better, and one graph where a price instrument performs better. Label the resulting deadweight loss from each option, and describe briefly in words how it demonstrates the result. Be sure to clearly label your all axes and functions. 1.3 Weitzman also showed that if only benefits are uncertain, the two policy instruments perform equally well. Explain the intuition for this result. If the cost curve is known with certainty, but marginal benefits are uncertain, why doesn't it matter whether policymakers use taxes or cap-and-trade