Refer to the data provided in Table 16.3 below to answer the following question(s).Table 16.3 shows the situation facing two firms, both of which are polluting. Assume that each firm emits 5 units of pollution.Table 16.3Firm 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$8 $81$16$16212202 24 40318383 32 72426644 401125361005 48160Refer to Table 16.3. 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, how many permits will be traded between the two firms?
A. A will buy one permit from B.
B. B will buy one permit from A.
C. A will buy two permits from B.
D. B will buy two permits from A.
Answer: B
You might also like to view...
Define the term economics
What will be an ideal response?
When people play the "ultimatum game," in which one person gets to decide how to split a sum of money by offering a share to another person and neither gets anything if the second person rejects the offer, the result is often that the first person offers:
A. the full amount, and the second person accepts this offer. B. something close to 50-50, but the second person rejects this offer. C. something close to 50-50, and the second person accepts this offer. D. one cent, and the second person accepts this offer.
Australia is a net exporter of wool, free trade will benefit the ________.
A. domestic consumers B. poor citizens of the Australia C. domestic producers D. rich citizens of the Australia
Assume you and your cousin Vinny set up a partnership and your lawyer tells you that as the owners you will each face unlimited liability. What does that mean?
A) You are each liable for organizing the business. B) Each of you could stand to lose your personal wealth if the business goes bankrupt. C) There is no legal responsibility of the business in case a customer sues, as the business is legally untouchable. D) None of these explain what unlimited liability means.