Optimal Tax and Marginal Abatement Cost Quiz

In the context of emissions and abatement costs, what happens when the marginal cost (MC) is lower than the marginal damage (MD)?

Which of the following is true about optimal tax (t*) and pre-set tax (t)?

What is the preferred choice when the slope of the marginal cost curve is less than the slope of the marginal damage curve?

How do general results under uncertainty suggest choosing between licenses and taxes?

When true marginal costs of abatement are lower, what tends to happen with the abatement levels?

What is the implication when marginal damages are steeper in terms of emission production?

What does the firm need to consider to determine if they should adopt new technology without emissions regulation?

Which of the following is NOT a factor in determining the socially optimal adoption decision without emissions regulation?

How is the benefit to the firm from adoption calculated when bringing emissions tax into the picture?

In determining the socially optimal adoption decision without emissions regulation, which factor represents reduced social damage?

What does the firm need to compare with X to determine if they should adopt new technology without emissions regulation?

When considering taxation vs. licenses, what is included in the Net gain to firm from technology adoption?

What does an abatement subsidy involve?

In the context of abatement subsidy, what determines whether a firm will choose to abate?

What is an assumption made regarding firms under an emissions tax or standard policy?

How does an abatement subsidy change the Marginal Benefit of Abatement (MBA)?

What concept can be used as an equivalent representation of abatement in the context of abatement subsidy?

What does an Emissions Tax, Emissions Standard, and Abatement Subsidy have in common?