SIMON FRASER ECON260 Assignment_2_10-1

SIMON FRASER ECON260 Assignment_2_10-1 - Simon Fraser...

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Simon Fraser University Department of Economics Economics 260 K. Wainwright page 1 of 2 Term Assignment #2 Updated Spring 2010 Instructions : The due date will be posted on the course website and announced in lecture. Late assignments will NOT be accepted . Assignments must be SINGLE SIDED with a cover page that includes your name, student number, tutorial number, and TA's NAME ( Total Marks for this assignment is 100) Question 1 (30) Suppose that the MD = 5E and with its current technology, the firm’s MAC is given by MAC 1 = 200 – 5E. a) Determine the socially optimal level of emissions E. What is the TOTAL Social Cost? b) Determine the emissions tax that would achieve the socially optimal level of emissions. What is the total PRIVATE costs to the Firm? Now suppose the firm can adopt a new technology that changes is MAC to New MAC 2 = 160 – 4E Assuming no change to standard or tax rate after the change in technology, Calculate change in costs for the firm from adopting the new technology when: c) The government uses an emissions standard equal to your answer in (a) above d) The government uses an emissions tax equal to your answer in (b)
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This note was uploaded on 04/15/2010 for the course ECON 260 taught by Professor Wainwright during the Spring '10 term at Simon Fraser.

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SIMON FRASER ECON260 Assignment_2_10-1 - Simon Fraser...

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