Suppose there are three power-generating plants, each of which has access to 5 different production processes. The table below summarizes the cost of each production process and the corresponding number of tons of smoke emitted each.ProcessABCDE(smoke/day)(4 tons/day)(3 tons/day)(2 tons/day)(1 tons/day)(0 tons/day)Cost to Firm X ($/day)$500$514$530$555$585Cost to Firm Y ($/day)$400$420$445$480$520Cost to Firm Z ($/day)$300$325$360$400$550 The least costly way of lowering smoke emissions from 12 tons to 9 tons per day would be for:
A. Firm X to emit 2 tons, Firm Y to emit 3 tons and Firm Z to emit 4 tons.
B. Firm X to emit 1 ton, Firm Y to emit 4 tons and Firm Z to emit 4 tons.
C. each firm to reduce emissions by 1 ton, emitting 3 tons each.
D. Firm X to emit 4 tons, Firm Y to emit 3 tons and Firm Z to emit 2 tons.
Answer: A
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A firm's revenue minus its factor payments equals
a. zero. b. the profits or losses earned by the firm. c. the quasi-rents earned by the factors of production. d. the firm's total revenue.
Which one of the following would be an effective fiscal policy in raising national income and reducing unemployment?
A. a decrease in government expenditures B. an increase in net taxes C. cutting back on unemployment benefits D. A reduction in income taxes
When supply and demand for a product increase simultaneously, we
A) can predict that both the market clearing price and the equilibrium quantity will increase. B) can predict that both the market clearing price and the equilibrium quantity will decrease. C) cannot predict the market clearing price, but know that the equilibrium quantity will increase. D) cannot predict the change in either the equilibrium quantity or the market clearing price.
Answer the following statement(s) true (T) or false (F)
1. Present-day fluctuations in exchange rates are determined solely by market forces. 2. When exchange rates change, they affect not only the currency market but the product markets as well. 3. Since the advent of flexible exchange rates, world trade has expanded. 4. The most important advantage of the Bretton Woods fixed-rate system is that it has reduced the speculative rampages that were common under a flexible-rate system. 5. Booming futures markets in foreign currencies opened in Chicago, New York, and in foreign financial centers during the years that the world used the Bretton Woods system.