There are 12 rice growers and 10 wheat growers in a water catchment, each of which...

  

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There are 12 rice growers and 10 wheat growers in a water catchment, each of which use fertilizers that pollute the local environment. Each rice grower has total savings: TS, = 20q2q² where q, is the pollution emitted by rice grower i. Each wheat grower has total savings: T'Sw=20g, - q where q; is the pollution emitted by wheat grower j. 1. What is the unregulated level of pollution for each type of grower? 2. The government uses tradeable emissions permits to control pollution from the rice and wheat growers. If the government issues a total of 200 permits, what will be the price of the permits? Assume that the aggregate marginal damage from pollution is: MD = 3.875Q where Q is the total pollution from all of the rice and wheat growers. 3. How many permits should the government issue if it wants to obtain the socially-optimal level of pollution? 4. Under the scheme you recommend in part 3, how much does each rice and wheat grower pollute? Which type of grower pollutes more? Why? There are 12 rice growers and 10 wheat growers in a water catchment, each of which use fertilizers that pollute the local environment. Each rice grower has total savings: TS, = 20q2q² where q, is the pollution emitted by rice grower i. Each wheat grower has total savings: T'Sw=20g, - q where q; is the pollution emitted by wheat grower j. 1. What is the unregulated level of pollution for each type of grower? 2. The government uses tradeable emissions permits to control pollution from the rice and wheat growers. If the government issues a total of 200 permits, what will be the price of the permits? Assume that the aggregate marginal damage from pollution is: MD = 3.875Q where Q is the total pollution from all of the rice and wheat growers. 3. How many permits should the government issue if it wants to obtain the socially-optimal level of pollution? 4. Under the scheme you recommend in part 3, how much does each rice and wheat grower pollute? Which type of grower pollutes more? Why?

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1 The unregulated level of pollution for each type of grower is zero 0 Since the government is not y... View the full answer