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QUESTION 3 There are 10 rice growers and 9 wheat growers in a water catchment, each of which use fertilizers that pollute the local environment. Each rice grower has total savings: TSr=30qi2.5qi2 where qi is the pollution emitted by rice grower i. Each wheat grower has total savings: TSw=30qj1.5qj2 where qj 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=1.3Q 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