Suppose there are two polluters with different MAC curves. Show how the regulator would aggregate these...

Suppose there are two polluters with different MAC curves. Show how the regulator would aggregate these MAC curves and then use them to determine the socially efficient equilibrium level of emissions, E*. Once E* is determined, how would the regulator ensure that the sum of emissions from each polluter totals E*? (Hint: Aggregation should reflect the equimarginal principle.)

Assume that the government does not know the location of the polluters MAC curve. The government plans to impose an emissions tax. Would the polluter have an incentive to reveal its MAC curve to the government? Could an efficient equilibrium be reached? Explain why or why not.

Why do pollution taxes have a more uncertain impact on the level of pollution than does a standard

Expert Solution

i gave the answer in detailed view so, it may look like huge one.

Rahul Sunny answered 2 years ago

A. Why does there seem to be three different Aggregate Supply curves in the Aggregate Supply/Aggregate...

A. Why does there seem to be three different Aggregate Supply curves in the Aggregate Supply/Aggregate Demand models? The Aggregate Supply curve changes depending the time of year. The Aggregate Supply curve usually is upward sloping The Aggregate Supply curve usually trends toward equilibrium The Aggregate Supply/Aggregate Demand model can have any of the three supply lines, depending on economic circumstances. B. If the Aggregate Supply line is shown as a vertical line: The economy is at less than full...

Using the aggregate demand – aggregate supply (AD-AS) diagram, show how the four economic events would...

Using the aggregate demand – aggregate supply (AD-AS) diagram, show how the four economic events would affect economic activity and the price level. (Note: use a separate AD-AS diagram for each event) (a) An improvement in the marketing and selling skills of firm managers; (b) An increase in personal income tax; (c) An increase in exports; (d) A significant destruction in an economy’s capital stock because of war;

Suppose that the government budget deficit increases. Show, what curves in the open-economy macroeconomic model would...

Suppose that the government budget deficit increases. Show, what curves in the open-economy macroeconomic model would shift? What are the effects of this event on the economic variables like real interest rate, net capital outflow, and real exchange rate?

Assume a Big Mac is $3 in the U.S. How much would the Big Mac cost...

Assume a Big Mac is $3 in the U.S. How much would the Big Mac cost in China? Conduct some research. Identify at least one difference between the typical menu offering in the U.S. and the menu offering in China. Be sure to provide a citation. Conduct some research. Identify a major fast-food competitor that McDonalds faces in China. Be sure to provide a citation. Conduct some research. Locate a video commercial for McDonalds in China. Identify at least one...

1. Describe the three curves that describe the AD-AS model and show long run aggregate equilibrium...

1. Describe the three curves that describe the AD-AS model and show long run aggregate equilibrium in a graph. 2. Describe and show the AD curve. Include the reasons it slopes downward. 3. Explain the counteracting forces that act against the reasons for a downward sloping AD curve. 4. Describe and show the shift factors for the AD curve. Show how each relates to both increases and decreases in AD.

Using supply and demand curves for fossil fuels, show how economists would explain and attempt to...

Using supply and demand curves for fossil fuels, show how economists would explain and attempt to solve the problem of climate change

The following graph shows the aggregate demand curve. Suppose the governments of two different economies, economy...

The following graph shows the aggregate demand curve. Suppose the governments of two different economies, economy J and economy K, implement a tax cut of the same size. The tax cut in economy J is permanent, while the tax cut in economy K is temporary. The economies are identical in all other respects. The tax cut will have a larger impact on aggregate demand in the economy with the (temporary tax cut or permanent tax cut)

QUESTION TWO [20] Show the effect of the following transactions of Mac Limited on the accounting...

QUESTION TWO [20] Show the effect of the following transactions of Mac Limited on the accounting equation using the format provided. Use + if the element increases, - if the element decreases and 0 if the element remains unchanged. Also indicate the amount. E.g. Mac bought stationery on credit, R900. No. Assets = Equity + Liabilities E.g. 0 -900 +900 Transactions: 2.1 Bought invoice books on credit, R1 300. 2.2 Bought a computer by cheque, R230 000. 2.3 Cash received...

Show how two Cournot mineral water producers use their cost and demand curves to determine their...

Show how two Cournot mineral water producers use their cost and demand curves to determine their outputs given each others output. Show how this determines their best response curves.

How to show Aggregate Demand and Short Run Aggregate Supply declining on a AD-AS diagram and...

How to show Aggregate Demand and Short Run Aggregate Supply declining on a AD-AS diagram and where to mark the equilibrium price

Question