Purchase Solution

MSB and MSC functions

Not what you're looking for?

Ask Custom Question

It is well documented that the carbon monoxide (CO) emissions from combustible engines increase in colder climates. This implies that the associated damages are expected to be less severe in summer months than in winter. Nonetheless, air quality control authorities use a standard for CO that is uniform throughout the year with no allowance for seasonal effects. Use this information and the following model to answer the questions:

MSB of CO abatement in winter=350-0.5A
MSB of CO abatement in summer+ 140-0.2A
MSC of CO abatement= 0.2A where A is the level of CO abatement.

a. Graph the MSB and MSC functions on the same diagram
b. Assume the government sets a uniform standard for winter and summer at A=500. Support or refute this policy based on the criterion of a
allocative efficiency, using your model to explain your response.
c. If you were in charge of setting policy for CO emissions, what action would you recommend to ensure an allocatively efficient outcome across the two seasons

Purchase this Solution
Solution Summary

MSB and MSC functions are analyzed.

Solution Preview

a.
Graph the MSB and MSC functions on the same diagram.
See EXCEL for graph.

b.
Under a uniform abatement standard of 500, the MSB in winter equals $100 and the MSB in summer equals ...

Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

View More Free Quizzes
Related BrainMass Solutions

  • efficient level of abatement

    MSB and MSC of abatement are emphasized.

  • marginal benefit curves

    In the absence of any externality , marginal social cost(MSC) = marginal private cost (MPC) and marginal social benefit(MSB) = marginal private benefit(MPB).

  • A Short Example of Externalities (Coase Theorem)

    Q_ solves MSB = MSC, and so 24 = 12 + 3Q. Thus, Q_ = 4. (b) Since Jack has the property rights, he will want to produce at the point where MPB = MPC. This gives 24 = 10 + 2Q, and so Qm = 7.

  • Marginal social benefit

    to acccomplish this objective you have estimated the following equations: (1) MSB = 140 - 0.1Qb; (1) is marginal social benefit equation (2) MSC = 20+0.05Qc; (2) is marginal social cost equation a.

  • Marginal cost and snowplowing

    Vertical summation of 12 -Z and 8-2Z gives us the MSB curve shown on the attached file. At $16, the MSC, we find that this curve is given by 20 -3Z = MSB. Setting this equal to 16 and solving, we find Z = 4/3.

  • cigarette consumption - Effect of tax

    360827 Taxes, MPB, MSB a. Calculate the equilibrium price and quantity (million packs/year) before the tax is imposed. In the figure from our notes, this is where MSC = MPB. b.

  • Investment Transactions

    Available-For-Sale Investments and the Long-Term Investments in the MSC accounts on NASDAQ's balance sheer at December 31, The attached MS Excel spreadsheet contains detailed illustrations and instructions for the NASDAQ Corporation

  • Show results for specific operations

    Shift all bits right except the sign bit which is the MSB. result: 1000 000 1100 1010 ashl: Arithmetic shift left. Shift all bits left except the sign bit which is the MSB.

  • Target Costing in Competitive Marketplace

    If your answer to requirement (4) is no, suggest and briefly describes a procedure that MSC might use to achieve the desire result. Dear student, Answer attached.

View More Related Solutions