How would the change in total economic surplus beaffected if the law instead required health… 1 answer below »

1. How would the change in total economic surplus beaffected if the law instead required health insurance to pay only $500 perprocedure?

Don't use plagiarized sources. Get Your Custom Essay on
How would the change in total economic surplus beaffected if the law instead required health… 1 answer below »
For as low as $13/Page
Order Essay

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:

Process A B C D E (smoke) (4 tons/day) (3tons/day) (2 tons/day) (1 ton/day) (0 tons/day) Cost to Sludge Oil 50 70 120 200 500 ($/day)           Cost to Northwest 100 180 500 1,000 2,000 Lumber ($/day)          

a. If pollution is unregulated, which process will each firm use, and what willbe the daily smoke emission?

b. The City Council wants to curb smoke emissions by 50 percent. To accomplishthis, it requires each firm to curb its emissions by 50 percent. What willbe the total cost to society of this policy?