1.consider a firm that owns a gold mine. the firm extracts q0 in the

Question

1.consider a firm that owns a gold mine. the firm extracts q0 in the

first period and q1 in the second period. The maximum amount of gold the firm can extract is q0 +q1 =Q The marginal resource rent is MR= a - q in each period. For a given market interest rate r and two periods ( t=0 and t=1) how much gold does the firm extract in period 0? please round your answer
Q= 100
a= 100
R= 0.1
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2.consider a firm producing output q. The marginal cost of production is MC = a + bq and the per-unit output price is p. Additionally, there are marginal externalities equal to ME = cq
What is the Pigouvian tax per quantity produced?
P= 12
a=6
b=2
c=1
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3 .consider N identical firms producing output q that they sell for a constant price p. The marginal cost of production is mc = a +bq additionally there are negative marginal externalities equal to me = cq. the government implements a cap-and-trade system that limits production to the socially optimal level. A firm needs one quota to produce one unit of q. the firms can trade quota. What is the equilibrium quota price?

P= 20
a= 10
b=2
c=2
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4. climate change causes considerable damages. However, avoiding climate changes is also expensive. consider two countries N and S. Assume that in a business as usual scenario climate change causes 10 billion in N and 5 billion in S. Consider a climate policy which would reduce those damages to 5bilion in N and to 2 billion damages in S. This policy would cost 5 billion in N and 2billion in S. is this policy a

-no efficiency improvement
-pareto improvement
-kaldor- hicks improvement and a pareto improvement
-kaldor- hicks improvement

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Answer 1

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