Part 2: Answer one of the following two problems: (35 pts) 2. The EPA regulates carbon monoxide (CO) emissions from a market consisting of many small firms. The EPA's staff has measured the annual marginal benefits of reducing CO to be equal to MB =250 - 10A, and the annual marginal costs of reducing CO to be MC = 100 + 2.5A, where A represents the number, in tons, of CO reduced. a. Determine the efficient amount of reductions (in tons), the marginal benefit and cost of the reductions at the efficient level, and the net benefit to society, in dollars, resulting from the reductions. b. A citizen's group has criticized the EPA's analysis, saying that the EPA should require 5 more tons of reductions than the amount you solved for in part a. Determine the marginal benefit and marginal cost of making those additional reductions. Is such a reduction an improvement in efficiency over your answer in part a? 3. An area near town attracts local residents and visitors from surrounding counties and states - swimmers, fishers, campers, bird-watchers, runners, hikers, and the likeThe area is replete with various flora and fauna, and provides a variety of ecological services. At the request of a local wildlife & nature organization, economists have studied the area, collected data by means of the contingent valuation method, and have estimated a willingness-to- pay function to visit the area equal to WTP - 7- Q (WTP is expressed in dollars, and Q in number of trips per month). The wildlife organization is considering purchasing the area, and, using the information from the willingness to-pay analysis, charging visitors a fee sufficient to maintain the area. a. Determine the total value the area provides for its users, as indicated by the economists' analysis. b. Given a proposed fee of $2.50 per trip, what is the monthly net benefit for users of the area