The Two Firms Listed Below Have Five Different Technologies for Pollution

question 8

Multiple Choice

The two firms listed below have five different technologies for pollution control to choose from: 1,2,3,4 and 5.The amount of pollution emitted and the cost of the technologies are shown in the table.In the absence of government oversight,the firms will pick technology 1 and emit 4 tons each.The government is considering two plans to reduce pollution: a 50% reduction by both firms or selling pollution permits.One permit entitles the owner to emit one ton of pollution.Without a permit,no pollution can be emitted.
-Refer to the information above.Suppose that the government decides to sell four permits and an environmental group is determined to only allow three tons of pollution to be emitted.To accomplish its goal,the environmental group should bid __________ for the permit.

• A) $500
• B) $300
• C) $250
• D) $200
• E) $100

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Definitions:

Time Wages

Compensation paid to an employee based on the amount of time worked, typically expressed as an hourly rate.