Question 10.4

1. Why an emissions tax smaller than or greater than the marginal social cost at Q_OPT leads to a smaller total surplus compared to the total surplus generated if the emissions tax had been set optimally

2. Why a system of tradable emissions permits that sets the total quantity of allowable pollution higher or lower than Q_OPT leads to a smaller total surplus compared to the total surplus generated if the number of permits had been set optimally.