EC238 Study Guide - Brie, Social Cost, Root Mean Square

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14 Apr 2014
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[5] (a) what are the social costs of pollution (total damage costs plus to- tal abatement costs) if rms are not required to do any abatement. E0 is the level of emissions that obtains if rms do no abatement. Trivially of course, tac=0, but now we can determine the tdc from our mdc curve. The mdc is (10 + 0. 8 550) and tdc is equal to the area under the mdc curve, ,500. Total social cost of pollution in this case is the total damage cost of. Show your calcula- tions and very brie y explain. To nd this we need to determine the level of emissions that equates. Now we need to determine the total abatement cost (tac) and total damage costs (tdc). = a+bmdctac tac equals the area of triangle e with base 450 (550-100) and height . Tdc tdc equals the area of triangle c with height high (-

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