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, what
is the total cost of the pollution reduction?
A. $48
B. $80
C. $86
D. $162
Answer: C
You might also like to view...
Subsidies are most likely to:
A. leave total economic surplus unchanged, but transfer surplus from producers to consumers. B. reduce total economic surplus. C. increase total economic surplus. D. reduce consumer surplus.
A graph of the value of one variable against the value of another variable is known as a
A) two-dimensional graph. B) three-dimensional graph. C) time-series graph. D) scatter diagram. E) two-variable graph.
What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?
a. Price will fall, and the effect on quantity is ambiguous. b. Price will rise, and the effect on quantity is ambiguous. c. Quantity will fall, and the effect on price is ambiguous. d. Quantity will rise, and the effect on price is ambiguous.
In a two-country, two-commodity model, the opening of trade will necessarily lead to complete specialization in the production of one good by one country and complete specialization in the production of the other good by the other country.
Answer the following statement true (T) or false (F)