Week 10_microecon

Week 10_microecon - Week 10 2. I do not agree that any...

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Week 10 2. I do not agree that any taxes should allow any form of pollution. To me the planet has nothing to gain no matter how much tax we place on “allowing” people to pollute. Do we allow people to murder or rape others just because they have money and can afford to do so? I do not understand how we can say and justify that if we tax companies that it is ok to pollute and harm our environment. The book states that no one would want to live without the pollution as it would but us behind times…well I for one would be happy to do just that. I am sure others would as well. I am not saying I am perfect and do everything I can or should in regards to pollution but I also do not see it getting any better without major change. b. I suppose if I had to agree with a side I would agree that I rather them levy the tax on the side of the market generating the externality. 11 a. Permits are worth $25 to firm B, $20 to firm A, and $10 to firm C, because that is the cost of reducing pollution by one unit. Firm B faces the highest costs of reducing pollution, it will keep its own 40 Permit and then buy 40 permits from the other firms, so that it can still pollute 80 units. That leaves 40 permits for firms A and C. Firm A values the permits most highly, it will keep its own 40 permits. So it must be that firm C sells its 40 permits to firm B. Thus firm B does not reduce its pollution at all, firm A reduces its pollution by 30 units at a cost of $20 x 30 = $600, and firm C reduces its pollution by 50 units at a cost of $10 x 50 = $500. The total cost of pollution reduction is $1,100.
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Week 10_microecon - Week 10 2. I do not agree that any...

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