Refer to the data provided in Table 16.4 below to answer the following question(s).Table 16.4 shows the situation facing two firms, both of which are polluting. Assume that each firm emits 5 units of pollution.Table 16.4Firm AFirm AFirm AFirm BFirm BFirm BReduction of Pollution by Firm AMC of reducing pollution for Firm ATC of reducing pollution for Firm AReduction of Pollution by Firm BMC of reducing pollution for Firm BTC of reducing pollution for Firm B1$2$21$16$162 6 82 24 4031220332 724204044011253070548160Refer to Table 16.4. Suppose the government wants to reduce the total amount of pollution from the current level of 10 to 4. To do this, the government caps each firm's emissions at 2 units and issues 2 permits to each firm. If firms are allowed to trade permits and
all possible trades are made, Firm B will reduce its pollution by a total of ________ unit(s).
A. 0
B. 1
C. 2
D. 3
Answer: B
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As the ________ becomes larger, the distance between the line of absolute equality and the ________ becomes greater.
A. Gini coefficient; Lorenz curve B. Gini coefficient; production possibilities curve C. Income distribution size; Lorenz curve D. Lorenz curve; Gini curve
If the price were $15, what would this firm do in the (a) short run? (b) the long run?
PriceQuantity SuppliedQuantity Demanded$00300$110250$250180$390150$4120120$515090$618050 Refer to Table 6.1, which gives the daily supply and demand schedules for cups of coffee at a kiosk in a shopping mall. If the government places a $4 per cup tax on coffee, how many cups of coffee will be bought and sold after the tax is imposed?
A. 50 B. 90 C. 150 D. 120
Suppose a single firm gains control of an industry by preventing other firms from entering the industry. As a result, the price charged by the single firm is much higher than the price that would be charged by many different firms producing this product in a competitive market. This situation can best be described as:
A. a government failure. B. a competitive outcome. C. a market failure. D. an efficient outcome.