3 In The Figure Below Mb1 Is The Marginal Benefit That Town 1 Gets From Abatement Mb2 Is The Marginal Benefit For Tow 1 (391.99 KiB) Viewed 71 times
3. In the figure below, MB1 is the marginal benefit that town 1 gets from abatement; MB2 is the marginal benefit for town 2. MC, A is the marginal cost of abatement for source A, and MC, B is the marginal cost of abatement to source B. Use this figure to answer the following questions. 20 16 MB1 12 MC,A $/Abatement 00 0 -4 MB2 2 6 Abatement 8 10 MC,B 12
C. If source A is in town 1, and if source B is in town 2, is a uniform pollution tax or a uniform pollution standard (that is, a tax or a standard that is the same in both places) more efficient? Why? d. If source A is in town 2, and if source B is in town 1, does that change your answer in (c)?
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