Refer to the Figures Below to Answer This Question

question 37

Essay

Refer to the figures below to answer this question:
Cap-and-trade versus emissions fee when marginal social benefits are inelastic and costs are uncertai Cap-and-trade versus emissions fee when marginal social benefits are elastic and costs are uncertain:
a)In case of an inelastic marginal social benefit curve, what type of pollution reduction system shoul the government employ? Why?
b)If the social benefit curve is elastic, does your answer change?
c)What are the advantages and disadvantages of cap-and-trade systems over emission fee systems when the inflation and change in marginal costs are considered?

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Definitions:

Bullwhip Effect

A phenomenon in supply chain management where small changes in demand at the consumer end cause larger magnifications in demand upstream.

Human Resource Supply

The availability of individuals with the skills and qualifications required to meet the labor needs of employers.

External Supply

Members of the workforce not currently employed by the firm, who are currently undergoing training, working for competitors, members of unions or professional associations, in a transitional stage, between jobs, or unemployed.

HR Professionals

Individuals or teams specializing in managing recruitment, training, performance, and well-being of employees within an organization.