This exercise will help illustrate why command and control policies are less efficient than market based...
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This exercise will help illustrate why command and control policies are less efficient than market based policies. Read the following scenario, and fill out the tables provided in the attached spreadsheet. Please only fill out the tables in the spreadsheet and do not alter it otherwise. For several decades, EquiGreen, a specialty foods company and major employer in the coastal Pacific Northwest, has been disposing of organic liquid and solid waste (mostly whey from dairy, soybean processing byproducts, and food washing grey water) from its production processes in disposal yards on its property. The amount of waste was previously found to be acceptable, but with the booming economy, EquiGreen's production volumes have pushed the levels of waste high enough that they have begun to leach into surrounding soils and groundwater sources. The local environmental regulator has been tasked with developing a mitigation (abatement) strategy with the company. It has been estimated that EquiGreen will need to reduce its pollution by 100 units per year to remain at acceptably safe levels. A list of identified options is attached, along with their associated costs. Question 1. Assuming EquiGreen is a profit maximizing firm, predict the plan the company would develop to address the issue. Include the mix of activities it would choose, the total units abated and total cleanup cost of the plan. Fill out all the green-tinted spaces in Table 2 on the attached spreadsheet with your answers. Question 2. A local government official has publicly insisted that the company utilize the maximum amount of water saving production technology available because according to the official, "as a community, we know that water is life." What would the social cost of cleanup including this recommendation total? Fill out all the green spaces in Table 3 of the attached spreadsheet with your answers. Table 2-Strategy chosen by EquiGreen Abatement Options End of pipe screens Trucking waste to safer location Quasi sealed Settlement Tanks Water saving production technology Recirculators Grand Total Table 3-Strategy with the government mandate Abatement Options Units abated using this. option End of pipe screens Trucking waste to safer location Quasi-sealed Settlement Tanks Water saving production technology Recirculators Grand Total Units abated using this option Cost per unit $10 $20 $17 $21 $15 Cost per unit $10 $20 517 $21 $15 Total cost of this option Total cost of this option 0 This exercise will help illustrate why command and control policies are less efficient than market based policies. Read the following scenario, and fill out the tables provided in the attached spreadsheet. Please only fill out the tables in the spreadsheet and do not alter it otherwise. For several decades, EquiGreen, a specialty foods company and major employer in the coastal Pacific Northwest, has been disposing of organic liquid and solid waste (mostly whey from dairy, soybean processing byproducts, and food washing grey water) from its production processes in disposal yards on its property. The amount of waste was previously found to be acceptable, but with the booming economy, EquiGreen's production volumes have pushed the levels of waste high enough that they have begun to leach into surrounding soils and groundwater sources. The local environmental regulator has been tasked with developing a mitigation (abatement) strategy with the company. It has been estimated that EquiGreen will need to reduce its pollution by 100 units per year to remain at acceptably safe levels. A list of identified options is attached, along with their associated costs. Question 1. Assuming EquiGreen is a profit maximizing firm, predict the plan the company would develop to address the issue. Include the mix of activities it would choose, the total units abated and total cleanup cost of the plan. Fill out all the green-tinted spaces in Table 2 on the attached spreadsheet with your answers. Question 2. A local government official has publicly insisted that the company utilize the maximum amount of water saving production technology available because according to the official, "as a community, we know that water is life." What would the social cost of cleanup including this recommendation total? Fill out all the green spaces in Table 3 of the attached spreadsheet with your answers. Table 2-Strategy chosen by EquiGreen Abatement Options End of pipe screens Trucking waste to safer location Quasi sealed Settlement Tanks Water saving production technology Recirculators Grand Total Table 3-Strategy with the government mandate Abatement Options Units abated using this. option End of pipe screens Trucking waste to safer location Quasi-sealed Settlement Tanks Water saving production technology Recirculators Grand Total Units abated using this option Cost per unit $10 $20 $17 $21 $15 Cost per unit $10 $20 517 $21 $15 Total cost of this option Total cost of this option 0
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Question 1 Assuming EquiGreen is a profitmaximizing firm it would choose the options that provide th... View the full answer
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Auditing Cases An Interactive Learning Approach
ISBN: 9780134421827
7th Edition
Authors: Mark S Beasley, Frank A. Buckless, Steven M. Glover, Douglas F Prawitt
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