With Marketable Pollution Permits, If the Number of Pollution Rights

question 54

Multiple Choice

With marketable pollution permits, if the number of pollution rights available increases, the equilibrium price _______ and the equilibrium quantity _______ .

• A) increases; does not change
• B) increases; increases
• C) decreases; does not change
• D) decreases; increases

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Definitions:

Collude

The act of cooperating or conspiring, especially in a secretive manner among firms, to limit competition or manipulate market prices.

Labor Supply Curve

A graphical representation showing the relationship between the wage rate and the quantity of labor workers are willing to offer at those wages.

Marginal Cost

The cost incurred in producing one additional unit of a product or service, a key concept in economics to optimize production levels.

Weekly Wage Rate

The amount of money an individual earns for one week of work, typically based on an hourly or salaried basis.