When Emissions Are Measured on the Horizontal Axis, the Marginal

question 120

Multiple Choice

When emissions are measured on the horizontal axis, the marginal cost of abating emissions is:

• A) downward-sloping because emissions become more and more easy to eliminate once the firm makes the initial commitment to do so.
• B) downward-sloping because a high level of emissions is cheap to attain, and a low level of emissions is expensive to attain.
• C) upward-sloping because emissions become more and more easy to eliminate once the firm makes the initial commitment to do so.
• D) upward-sloping because a high level of emissions is cheap to attain, and a low level of emissions is expensive to attain.
• E) horizontal because the technology to remove emissions is assumed constant.

---

Definitions:

Conversion Ratio

The specific quantity of a secondary security that can be converted from a primary security, used in the context of convertible bonds and preferred stocks.

Employee Stock Options

These are options granted to employees as part of their remuneration package, allowing them to purchase company stock at a set price after a certain period.

Vesting Period

The period of time before an employee gains unconditional ownership over employer-provided stock or contributions to a retirement plan.

Call Option

An agreement in the realm of finance that permits the purchaser to acquire a stock, bond, commodity, or another asset at a predetermined price during a defined timeframe, without compelling them to do so.