Use the following information to answer the next THREE questions:

Consider two coal-fired power plants that pollute the air. Plant A's marginal abatement costs are given by MAC_A=9-e_A.Plant B's marginal abatement costs are given by MAC_B=20-2e_B.The government wants to reduce emissions from the two power plants to a total of e_A+e_B=10 and is currently considering the following policies to achieve its goal:

Policy 1: Issuing each plant a non-transferable permit allowing it to produce only 5 units of

pollution.

Policy 2: Issuing each plant a transferable permit allowing it to produce only 5 units of

pollution.

34. What would be the social costs of abating emissions under Policy 1? $ ________________

35. What would be the social costs of abating emissions under Policy 2? $ ________________

36. At what price would the transferable permits be traded under Policy 2? $ ______________