1. Let MAC1 = 100 - 10E and MAC2 = 50 - 10E. Graph each function and compute the aggregate MAC curve. Let MD = 30E, compute the socially efficient equilibrium. For the equations given above, suppose the government sets the pollution level at four units. What are the net social costs of this policy? 2. Suppose a technological change occurs that reduces the marginal costs of abatement for polluter 1 in the above equation to that of polluter 2. How does this affect the socially efficient level of pollution? Solve numerically and graphically. 3. When pollution regulations are imposed, governments incur enforcement costs that are part of social costs. Assume that enforcement costs are a constant amount, independent of the amount of pollution reduced. How would this change the CS Scadchion of the socially efficient equilibrium? Show graphically and explain. Discuss