Two firms, Industrio and Capitalista, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. Both firms currently use process A, and each emits 4 tons of smoke per day. The government is considering two plans to reduce pollution: requiring both firms to reduce pollution by 25 percent or auctioning pollution permits. Each permit would entitle the owner to emit one ton of smoke per day. Without a permit, no smoke can be emitted. Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Industrio ($/day) $350$400$500$700$1,000 Cost to Capitalista
($/day) $225$250$290$400 $600If neither firm had any permits, Industrio would be willing to pay up to ________ for the right to emit 1 ton of smoke, and Capitalista would be willing to pay up to ________ for the right to emit 1 ton of smoke.
A. $50, $50
B. $50; $25
C. $1000, $600
D. $300, $200
Answer: D
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A) increase taxes. B) increase the money supply and decrease the interest rate. C) increase government spending. D) increase oil prices. E) raise interest rates.
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Indicate whether the statement is true or false
Generally speaking, by 1860 which of the following groups could not vote in the U.S.?
a. white male citizens b. black males in New York and New England c. alien males in the agricultural Northwest d. white women in the North
The invisible hand principle indicates that competitive markets can help promote the efficient use of resources
a. only if buyers and sellers really care, personally, about economic efficiency. b. even if business firms fail to produce goods efficiently. c. if, and only if, businesses recognize their social obligation to keep costs low and use resources wisely. d. even when market participants care only about their own self interests rather than about the overall efficiency of resource use.