Lol more points *100*

Asteel company sells some steel to a bicycle company for $100. the bicycle company uses the steel to produce a bicycle, which it sells for $200. taken together, these two transactions contribute

Suppose that pollution in a neighborhood comes from two factories, with marginal benefit curves given by mb1 = 12 – p1 and mb2 = 8 – p2. the level of pollution in the neighborhood is given by p = p1 + p2. the government wants to limit pollution by instituting a pollution-rights market. the government’s desired level of p is 10, so it prints 10 pollution rights and offers them for sale to the firms. a) find the equilibrium selling price of a pollution right, as well as the allocation of rights (and hence pollution levels) across the two factories. b) repeat part (a) for the case where the government’s desired level of pollution equals 14. c) comment on the usefulness of a pollution rights market in achieving efficient levels of pollution abatement.

We said that the rationale for public policy is either market failure and/or government failure. address the following with this rationale in mind: a. define market failure from the perspective of the economist and government failure from the perspective of the political scientist (recall public choice theory). i. which definition best fits the policy problem of the law you are studying for your final paper? explain why. b. market failures are most commonly identified with negative externalities. provide an example and theoretical illustration/model of this phenomenon as well as a pro and con of government regulation as a corrective measure. c. lastly, provide an example of a public good and explain why it is framed within the theory of market failure. be specific.