In the preceding problem, drop the assumption that everyone is identical. Some hate pollution more than others do. The one person in Grimyville who hates pollution the most considers the cost of breathing it to be $100 per month. Required:
a. Explain why the demand curve for Grimyville apartments is downward sloping. At what price does it cross the supply curve? Draw the supply and demand curves for Grimyville apartments and show the consumers’ and producers’ surpluses.
b. Suppose that the air in Grimyville is brought up to Cleantown standards. Show the effects of this change on your graph. Show the increase in social gain. Who benefits from the clean air? Who loses from it?

Bandar industries berhad of malaysia manufactures sporting equipment. one of the company’s products, a football helmet for the north american market, requires a special plastic. during the quarter ending june 30, the company manufactured 35,000 helmets, using 22,500 kilograms of plastic. the plastic cost the company $171,000. according to the standard cost card, each helmet should require 0.6 kilograms of plastic, at a cost of $8 per kilogram. 1. what is the standard quantity of kilograms of plastic (sq) that is allowed to make 35,000 helmets? 2. what is the standard materials cost allowed (sq x sp) to make 35,000 helmets? 3. what is the materials spending variance? 4. what is the materials price variance and the materials quantity variance?