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Question 1. [40 points] There are two pollution firms, 1 and 2, and two individuals, A and B. The BAU emissions of the two firms are e? = e2 = 100 tons, and their abatement cost functions are C1(a1) = 2a], C2(a2) = =a2. The total damages that A and B suffer from the total emission e = e1 + e2 are given by DA(e) = =e2 and DB (e) = ez. a)[5 points] Graph the two marginal abatement cost curves of firms 1 and 2 as well as the total marginal abatement cost curve facing the society. b) [5 points] Graph the two marginal damage curves of A and B as well as the total marginal damage curve of the society. c)[20 points] Numerically find the socially efficient level of emissions of the two firms. d) [10 points] Suppose the government wishes to cut the total emission to 130 tons. Numerically find the cost effective emission by each firm. Is this allocation socially efficient? Why? Your answer here will not be graded. Combine all of your answer into a single PDF file and submit that file as an attachment in the next page. You can enter "46" in the box below