Refer to the Information in Figure 16

question 11

Multiple Choice

Refer to the information in Figure 16.5 below to answer the question(s) that follow. Figure 16.5
Figure 16.5 shows the marginal benefits of emitting pollution for the only two chemical companies in an industry, Alpha Chemicals and Beta Chemicals. Before any tax on pollution emissions is imposed, each company views pollution as being free.
-Refer to Figure 16.5. Suppose that instead of a tax, the government uses standards to achieve the emission reductions, requiring that each company cut its original emissions in half rather than allowing each company to choose emissions based on their costs. Compared to the situation under the tax, Alpha would ________ and Beta would ________.

• A) be able to increase emissions; have to further reduce emissions
• B) be able to increase emissions; be able to increase emissions
• C) have to further reduce emissions; have to further reduce emissions
• D) have to further reduce emissions; be able to increase emissions

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Definitions:

Theoretical

Concerning the abstract principles or models that are used to explain empirical phenomena.

Research-Oriented

Describes an approach or organization that prioritizes investigation, analysis, and study to drive innovation and development.

Contingency Approach

A management theory that suggests the best way to manage an organization depends on the specific circumstances.

Situational Appropriateness

The ability to adjust behavior, responses, or strategies based on the specific context or circumstances one is in.