Answer Happy

Please refer to the background information below to answer the following five questions. As is demonstrated in the following table, two firms, X and Y, have access to five different production processes. Each process has a different cost (S) and gives off a different amount of pollution. 3 Process (Daily Smoke) Firm X Firm Y A (6 tons) 405 345 B (5 tons) 530 380 (4 tons) 835 525 D (3 tons) 1305 905 E (2 tons) 1865 1370 F (1 tons) 2605 1880 G (0 tons) 3405 2445 38. Originally, the pollution is unregulated, and negotiation between the firms and their victims is impossible. So the total pollution is [ Answer38A = 12 ) tons / day and the total cost of production for the two firms together is $[ Answer38B = 750 ). 39. If the government sets a tax on each ton of pollution emitted each day to cut the total pollution by 4 tons, then relative to the unregulated case, the tax should be at least [ Answer39A = 305 /ton and at most [ Answer39B = 380] /ton. 40. With the reduction of the 4 tons of pollution by taxation, the total production cost of the two firms will be $[ Answer40 = 1360/day. 41. If the government issues tradable pollution permits to the two firms to cut the total pollution by 4 tons (say, permits of 2 tons for each firm), and the firms can negotiate costlessly with each other, then relative to the unregulated case, the total production cost of the two firms will be $[ Answer41 = 1360] /day. 42. Using pollution permits as a tool to reduce pollution by 4 tons, the cost of reducing the pollution to the society is $[ Answer42 = 610] /day.