1. How would the change in total economic surplus beaffected if the law instead required health insurance to pay only $500 perprocedure?
2. Two firms, Sludge Oil and Northwest Lumber, have access to five productionprocesses, each one of which has a different cost and gives off a differentamount of pollution. The daily costs of the processes and the correspondingnumber of tons of smoke emitted are as shown in the following table:
a. If pollution is unregulated, which process will each firm use, and what willbe the daily smoke emission?