Need help with this Problem set, due after 6hr.

Question 1

In the southwest region of Freedonia lies an area known as the Wagstaff Triangle.This area is currently undeveloped.It is the habitat for the world renowned Wagstaff Elk (Cervus Wagstaffus).Two other key species that reside in this area are the Freedonian Grey Wolf (Canis Lupus Freedonus) and the Trumpish Marmot (Marmota Tangerinus).Two rivers and several creeks run through the Wagstaff Triangle and these waterways are home to the elusive Freedonian Ecofin (Esox Colonorum).Due to its unique and pristine ecological characteristics, several small towns are located just outside of the Wagstaff Triangle.Currently, the primary industry of these small towns is ecotourism.

However, this may be about to change.Recent technological innovations in medicine has established that the gall bladders of the Wagstaff Elk can be used in medical treatments and are therefore extremely valuable.

An industry group, the Society Conducive to Unrestricted Marketing, has suggested that the Wagstaff Elk be harvested and that permits could be sold to any harvesting company.Each permit would allow the harvest of one elk.The number of permits sold and their price would be established in an open market.

Do you agree with this group?Explain.

What policy would you suggest?

Question 2

The market for paper in Freedonia has the following demand and supply curves;

P = 80 - 0.0005 q

MPC = 20 + 0.0005 q

Where q is the quantity of paper, p is the price of paper and MPC is the marginal private cost of producing paper.Currently, there is no attempt to regulate the dumping of pollution by the paper mills into streams and rivers.As a result, dumping is widespread.The marginal external cost associated with the pollution is

MEC = 0.0002 q.

a.Calculate the competitive price and output, assuming that no attempt is made to monitor or regulate the dumping of pollution.

b.Determine the socially optimal level of paper production.

c.Draw a diagram showing the costs and benefits to society of allowing the market to be unregulated and the costs and the benefits associated with the social optimum.

Question 3

Consider a firm that emits pollution into the air.Suppose that the marginal damage costs associated with the emissions are given by

MDC = -15 + 4 e,

where e is the quantity of the emissions.

The firm's marginal costs of abatement are given by

MAC = 1200 - 20 e.

a. Determine the quantity of emissions that the firm would discharge in the absence of government policy.

b. Determine the socially efficient level of emissions.

c.Calculate the total costs to society for both a and b and draw a diagram illustrating these costs.

Question 4

It is sometimes argued that society should tolerate no crime.That is, it is argued that the crime rate should be driven to zero.What do you think of this suggestion?

Explain how your answer can be related to the right target rate for pollution.