Question

Power plants in Pennsylvania and West Virginia generate acid rain that erodes landmarks in New York State, such as the Statue of Liberty. The Administration of President Green decides to use an Executive Order to circumvent the US Congress and order the US Environmental Protection Agency (EPA) to reduce power plant emissions from Pennsylvania and West Virginia by 30 tons in total. The prevention cost schedules for each state are:

   MC_P = E_P

MC_WV = 2E_WV

Where MC are in billions of dollars per ton, the emissions reductions (E) are in tones, and the subscripts _P are for Pennsylvania and _WV for West Virginia.

1. Initially EPA forces both Pennsylvania and West Virginia to reduce emissions by 15 tons each. Find the amount spent on emission reduction in both states, the total amount spent, and the marginal cost in each state.

2. You argue that what the EPA has planned is not an optimal allocation. Design a minimum cost scheme; find the amount spent on emission reduction in both states, the total amount spent, and the marginal cost in each state. How much have you saved?

3. President Trump has proposed rolling back several Obama-era environmental regulations under the EPA. As a result, Pennsylvania and West Virginia can go back to polluting as they did before the executive action took place. Is there anything the politicians or citizens of New York can do? And, no, you can’t do anything illegal – so no bribes allowed.

Answer 1

The Problem is based on the environment concern Where power plants in pennsylvania and in West Virgina are eroding ladmarks situated in new york :Statue of liberty by acid rain generation . The administrative is stressed to correct the situation by reducing the emission level from both places in Quantity of 15 tons each in the order made to environment protection agency (EPA )

Answer:A

State	Amount spent on Reduction	Totol Spent	Marginal Cost
Pennsylvania	15 Billion dollar	15 Billion Dollar	1 Billion dollar
West Virginia	7.50 Billion Dollar	7.50 Billion Dollar	500 Million Dollar
Total		22.50 Billion Dollar

Since MC cost in Pennsylvania is Billions of dollar per ton for reducing 1 ton given in the question Hence for 15 Ton reduction will be 15 Billion dollar and in West Virginia two ton emission can be reduced by 1 billion of dollar hence the cost there shall be 7.50 Billion dollar

Answer:B

The reduction Quantity can be more in West virgina as the cost per billion dollar there is for 2 ton emission reduction . Hence 30 Ton Reduction can be done from there alone so that cost will be 15 Billion dollar For both state total amount spent will be 15 Billion dollar and savings will be 22.50-15 Billion dollar =7 Billion dollar

Answer:

The citizens or Politician of the new york can do force the Trump Government not to change the regulations as these Places will be polluting more in that case and harm the new york .

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