- A City S Government Wants To Tax A Factory S Pollution The City Has Access To Data About Two Kinds Of Masks A 25 Mask 1 (29.77 KiB) Viewed 19 times
A city's government wants to tax a factory's pollution. The city has access to data about two kinds of masks: a $25 mask that removes 100% of the pollution and a $10 mask that removes 50% of the pollution. The mask is effective for 1 day. Suppose an individual purchases the $10 mask. The factory emits 100 units of pollution, each pollution unit causes 0.1 sick days for the individual, and her opportunity cost of a sick day is $w. Find upper and lower bounds for w using the information provided. Assume that each person will buy a mask if the expected health benefits from using the mask for a day are greater than the cost of a mask.