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Suppose a government is debating whether to impose an emission standard of 150 tonnes or an emission tax of $150 per tonne on a firm.
Suppose a government is debating whether to impose an emission standard of 150 tonnes or an emission tax of $150 per tonne on a firm. In particular it wants to impose the policy that has great incentives for the firm to innovate. Recall that as the firm has different marginal abatement costs before and after innovation, there will be an incentive to innovate. The marginal abatement cost functions for the firm without and with innovation are: MAC 600 - 3E MAC = 400 - 2E where MAC is in dollars per tonne and E is in tonnes. Using above information, for each of the below statements, select true if the statement is true and select false if the statement is false. If there was an emission standard set equal to 150 tonnes and innovation, the firm's costs would be equal to $2,500. Choose. If there was an emission tax set equal to $150 per tonne and innovation, the total abatement costs would be equal to $5,625, False 4 If there was an emission tax set equal to $150 per tonne and no innovation, the total abatement costs would be equal to $3,750. Choose.. + If there was an emission tax set equal to $150 per tonne and no innovation, the total abatement costs would be equal to $3,750. Choose... If there was an emission tax set equal to $150 per tonne and no innovation, the polluter's total costs would be equal to $26,250. Choose.. if there was an emission standard set equal to 150 tonnes and no innovation, the firm's costs would be equal to $3,750. Choose... If there was an emission tax set equal to $150 per tonne and no innovation, the total tax bill would be equal to $22,500 False If there was an emission tax set equal to $150 per tonne and innovation, the total tax bill would be equal to $22,500. Choose.... If there was an emission standard set equal to 150 tonnes, the incentive to innovate would be equal to $2,500 Choose... If there was an emission tax set equal to $150 per tonne and innovation, the polluter's total costs would be equal to $24,375, Choogs: Overall, the incentive to innovate is greater with the emission tax set equal to $150 per tonne than with the emission standard set equal to 150 tonnes by $1,250. Choose... . Suppose a government is debating whether to impose an emission standard of 150 tonnes or an emission tax of $150 per tonne on a firm. In particular it wants to impose the policy that has great incentives for the firm to innovate. Recall that as the firm has different marginal abatement costs before and after innovation, there will be an incentive to innovate. The marginal abatement cost functions for the firm without and with innovation are: MAC 600 - 3E MAC = 400 - 2E where MAC is in dollars per tonne and E is in tonnes. Using above information, for each of the below statements, select true if the statement is true and select false if the statement is false. If there was an emission standard set equal to 150 tonnes and innovation, the firm's costs would be equal to $2,500. Choose. If there was an emission tax set equal to $150 per tonne and innovation, the total abatement costs would be equal to $5,625, False 4 If there was an emission tax set equal to $150 per tonne and no innovation, the total abatement costs would be equal to $3,750. Choose.. + If there was an emission tax set equal to $150 per tonne and no innovation, the total abatement costs would be equal to $3,750. Choose... If there was an emission tax set equal to $150 per tonne and no innovation, the polluter's total costs would be equal to $26,250. Choose.. if there was an emission standard set equal to 150 tonnes and no innovation, the firm's costs would be equal to $3,750. Choose... If there was an emission tax set equal to $150 per tonne and no innovation, the total tax bill would be equal to $22,500 False If there was an emission tax set equal to $150 per tonne and innovation, the total tax bill would be equal to $22,500. Choose.... If there was an emission standard set equal to 150 tonnes, the incentive to innovate would be equal to $2,500 Choose... If there was an emission tax set equal to $150 per tonne and innovation, the polluter's total costs would be equal to $24,375, Choogs: Overall, the incentive to innovate is greater with the emission tax set equal to $150 per tonne than with the emission standard set equal to 150 tonnes by $1,250. Choose
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