Suppose firms A and B both formerly emitted 200 tons of pollution per year, and are both required to reduce pollution emissions by 100 tons per year. Each of these firms are allowed to emit 100 tons per year, and these allowances are tradable. Assume that it costs Firm A $10 per ton to reduce emissions, while it costs Firm B $50 per ton to reduce emissions. If Firm A can reduce its emissions up
to 200 tons, then which of the following is true?
a. Efficient emissions trading would generate 100 percent reduction in emissions, and the total cost of reducing total emission would be $6,000.
b. Efficient emissions trading would result in firm A buying all 100 tons of pollution allowances from firm B.
c. Efficient emissions trading would generate the same 50 percent reduction in emissions, and the total cost of reducing total emissions by 200 tons would be $2000.
d. Efficient emissions trading would result in firm A buying all 200 tons of pollution allowances from firm B.
c
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Discrimination by customers creates a wage differential between two groups by creating a difference in the two groups' perceived
A) supply of labor. B) value of marginal product. C) marginal cost of labor. D) minimum wage.
A firm can choose a quantity of output, and the price is then determined by
a. the government. b. the supply schedule. c. consumers' demand. d. the average cost.
If inflation expectations rise, the short-run Phillips curve shifts
a. left. If inflation remains the same, unemployment falls. b. left. If inflation remains the same, unemployment rises. c. right. If inflation remains the same, unemployment falls. d. right. If inflation remains the same, unemployment rises.
Which of the following is an example of someone with inflationary expectations taking a step designed to insulate themselves from the higher expected rates of inflation
What will be an ideal response?