The MD and MAC curves below represent damage and abatement cost functions for a firm liable for damages caused by its emissions. Suppose the firm cleans up its emissions so as to minimize the sum of its abatement cost and compensation payment. What would be its total cost? Copyrighted material. Not to be shared. $15 MAC 10 25 MD A Emissions (tonnes/month)
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- Match the following costs to the correct classification of environmental cost. Cost Cleaning up a river after a hazardous material leak Hire of equipment used for clean up of toxic waste in the factory Performing contamination tests Forming environmental policies Environmental prevention cost Environmental internal failure cost Environmental detection cost Environmental external failure costPrice (dollars per gallon) $5.50 3.50 2.50 0 30 40 45 D S2 S₁ Quantity (millions of gallons per month)If n is the number of fishermen in the river, then each fisherman catches 10 + 120/n kg of fish each day (depending on how many fishermen there are). A kg of fish sells for 5 pounds, a fishing license costs 20 pounds, and a fisherman could also work at the docks for 80 pounds a day. How many fishermen will fish in the river each day? (a) 8 (b) 12 (c) 16 (d) 18 (e) 20
- which firm/s can close already to avoid futher loss?A firm has a marginal emissions benefit of 100-0.5*E in each of 2 years, where E measures emissions in tons. The marginal cost of emissions to society is 75/ton. The discount rate is 10% and the marginal cost of emissions also grows at 10% per year. The government decides to give the firm permits to emit 50 tons of emissions per year, but allows the firm to "bank" or "borrow" permits across the two years so that this effectively acts as a 100 ton cap on emissions over 2 years. How much will the firm emit in each year? If all firms are identical to the one you analyze here, is the government issuing too many or too few emission permits relative to the efficient level? How do you know?What is he social and financial implictions of generic pricing decisions for various stakeholders?
- 6. Machine A and Machine B are being considered for the production of a part of a product. The impor- tant differences between the machines are: Machine A Machine B 100 parts/hr 130 parts/hr Production rate Hours available for production Rejection rate 7 hrs/day 6 hrs/day 3 % 10 % The material cost is $6.00 per part, the operator cost is $15.00 per hour, and the variable overhead cost is $5.00 per hour. All defect-free parts produced can be sold for $12 each, and the rejected parts have no value. Assume that the daily demand for this part is large enough that all defect-free parts can be sold. Which machine should be selected? • What should the rejection rate be for Machine B to be as profitable as Machine A?A competitive industry has production processes that generate pollution. okay with studies carried out on the affected population, the marginal costs associated with contamination are constant and 500 u.m. for each unit of the good produced. These costs are associated with lost working days, illness treatment costs and the nuisance generated in the population. Currently the production level of the industry is 250 units and the market price is 1500 (um/unit). Market studies carried out by the firms estimate that if the price rises at 1,800 (mu/unit) the quantity demanded would drop to 200 units and the marginal cost of production of each firm at this new production level is 1,300 (m.u./unit). assume linearity in market demand and in the marginal costs of production of the firms. Graph to justify your answers. b)Graphically indicate and determine the magnitude of the social cost of the situation with a production level of 250 units.PROBLEM You own a firm that offers organlc coconut oil. Your objective is to determine the number of coconut oil to be produced each month in order to maximize revenues. The table below shows the total benefits (revenues) and costs of producing various volumes of coconut oll (. Control Variable (in 500 ml bottle) Total Benefits Total Costs (B) (C) 100 200 300 400 2000 3800 5400 6800 100 300 600 1000 500 600 700 800 900 1,000 8000 9000 9800 10400 10800 11000 1500 2100 2800 3600 4500 5500 1. Use the marginal analysis technique to determine the quantity of organic coconut oil that will maximize net benefils. Present results in lable form and highlight the maximizing level. (. 2. Graphically illustrate letter B. Separate the graphs for TB – TC approach, MB = MC rule, and net benefit (maximum). The sequence of the graph: (1) TB - TC approach (topmost graph); (2) net benefit (middle graph); and (3) MB, MC, & MNB (last, 3rd graph). But be sure that the graphs are parallel in X-axis so as to…
- A company has established that the relationship between the sales price for one of its products and the quantity sold per month is approximately D = 780 - 10p units. The fixed cost is $800 per month and the variable cost $30 per unit produced. What number of units, D*,should be produced per month and sold to maximize the profit per month related to the product? A 300 B 280 C) 480 D 240A competitive industry has production processes that generate pollution. okay with studies carried out on the affected population, the marginal costs associated with contamination are constant and 500 u.m. for each unit of the good produced. These costs are associated with lost working days, illness treatment costs and the nuisance generated in the population. Currently the production level of the industry is 250 units and the market price is 1500 (um/unit). Market studies carried out by the firms estimate that if the price rises at 1,800 (mu/unit) the quantity demanded would drop to 200 units and the marginal cost of production of each firm at this new production level is 1,300 (m.u./unit). assume linearity in market demand and in the marginal costs of production of the firms. Graph to justify your answers. )Determine the level of tax that would have to be applied to production to achieve the social optimum.Please no written by hand and no emage A Russian farmer's combine harvester for wheat with a 5-meter header can be operated at 4km/hour and for 6 hours in a day. Turning, adjusting and other interruptions amount to 12% of the effective operating time. Compute the following” a. Theoretical field capacity b. Field efficiency c. Effective field capacity d. Number of days it can take to harvest 200 hectares of wheat