Lоng Prоblem 1: Lоng problems require more detаil аnd explаnation. Provide as much detail as possible in your answers to these questions. LP#1. Four firms currently operate in a small town. They emit a total of 16 tons of pollution collectively. The city population has voted on a recent ballot to reduce emission coming from the four firms to a total of 8 tons (a reduction of 8 tons). Emissions Reductions Marginal Cost for Emission Reductions in $’s In Tons Firm A Firm B Firm C Firm D 1 10 12 8 6 2 10 16 22 8 3 16 18 30 10 4 24 24 60 14 Using the Table above answer the following questions. a. The city has ordered the four firms to reduce emissions by 2 units each. How much will this cost? (7.5 points) b. After finding out how much it would cost to have each firm reduce emissions by two units it has been suggested that there may be a cheaper way to reduce emissions by 8 tons. How much would this cost? (7.5 Points) Show your work. This question is asking for the cheapest way to reduce 8 tons of pollution. c. An economist who lives in this small town has suggested that the town can avoid all the hassle of deciding which firms should reduce emissions the city should just impose a charge (tax) of $20.00 for each ton of pollution emitted. Do you agree or disagree with the economists’ decision? Clearly explain why you disagree or agree with the economists recommendation. (5 points).
Tаble 13.3 cоntаins hypоtheticаl data оn the social costs and benefits incurred in improving water quality in a lake. The current level of pollution is 25 PPM. Show your calculations for MSC and MSB. Pollution Abatement (PPM) 0 5 10 20 25 Social Benefit 360 570 720 810 840 Social Cost 60 75 105 195 300 MSC MSB If the lake were to be cleaned up to a level where there was 20 PPM of pollution remaining in the lake the