Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. For this economy to move from Point B to Point C so that an additional 20 OLED televisions could be produced, production of LCD televisions would have to be reduced by
A. more than 30.
B. exactly 60.
C. fewer than 30.
D. exactly 30.
Answer: A
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In the above figure, the deadweight loss is zero if output is
A) 0 units. B) 10 units. C) 20 units. D) 30 units.
Both firm A and firm B emit 300 tons of pollution. Suppose both firm A and firm B have permits that allow each to emit 100 tons of pollution
If it costs $5,000 for firm A to eliminate 100 tons of pollution and it costs firm B $6,000 to eliminate 100 tons of pollution, then A) firm B will sell its permits to firm A for a price above $6,000. B) firm A will sell its permits to firm B for a price below $6,000. C) firm A will sell its permits to firm B for a price above $6,000. D) firm B will sell its permits to firm A for a price below $6,000.
Net exports are
A. the smallest component of GDP. B. income after taxes. C. the largest component of GDP. D. included in government spending.
Two firms, Industrio and Capitalista, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. Both firms currently use process A, and each emits 4 tons of smoke per day. The government is considering two plans to reduce pollution: requiring both firms to reduce pollution by 25 percent or auctioning pollution permits. Each permit would entitle the owner to emit one ton of smoke per day. Without a permit, no smoke can be emitted.ProcessABCDE(smoke/day)(4 tons/day)(3 tons/day)(2 tons/day)(1 tons/day)(0 tons/day)Cost to Industrio ($/day)$350$400$500$700$1,000Cost to Capitalista
($/day)$225$250$290$400$600 Suppose a permit system has been adopted and each firm has already purchased one permit. Industrio would be willing to pay up to ________ for the right to emit a second ton of smoke, and Capitalista would be willing to pay up to ________ for the right to emit a second ton of smoke. A. $100; $40 B. $500; $290 C. $200; $110 D. $200; $300