Previous Exams

# Spring 2012 Exam 1 Solution

Here are the final numerical results for each section of the exam.  You can use them to check your work if you do the exam for practice.  If you have trouble with the problems, or don't get the answers shown here, stop by during office hours or make and appointment and we can go over them.

(a) Business as usual (BAU) cost: $50M; (b) Plan A:$40M ($10M gain relative to BAU); (c) Plan B:$38M ($12M gain relative to BAU); (d) Plan B is best because it has the lowest cost (alternatively, it has the highest gain relative to BAU). ### Question 2 (a),(b) Pm=$480, Qm=240;

(c),(d) Ps=$600, Qs=200; (e) Gain is$4800.

(a) Qt=5838;

(b) T=$10.81; (c)-(h) in table below:  Type Original Emissions Qa Cost of abatement Unabated emissions Tax Payments H 200 21.62$117 178.38 $1928 L 500 108.11$584 391.89 $4237 ### Question 4 (a) Pp=$120 (Qt=90);
(b)-(d) in the table below:

 Type Original Emissions Qa Cost of abatement Target cost Change needed Permits to sell Permits to buy Initial allocation 1 60 40 $2400$0 -$2400 20 0 40 2 60 30$1800 $0 -$1800 15 0 45 3 60 20 $1200$5400 +$4200 0 35 5 ### Question 5 (a),(b) A=300, B=5; (c) Qe=55; (d) Psub=$25;

(e) Subsidy per unit: $55; (f)$3025.

URL: https://wilcoxen.maxwell.insightworks.com/pages/3626.html
Peter J Wilcoxen, The Maxwell School, Syracuse University
Revised 12/18/2012