Refer to the Information in Figure 16

question 25

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 outcome under the tax, this common standard would result in

• A) Alpha gaining more than Beta loses.
• B) Alpha gaining less than Beta loses.
• C) Beta gaining more than Alpha loses.
• D) Beta gaining less than Alpha loses.

---

Definitions:

Current Ratio

The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations with its short-term assets, indicating its financial health.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business.

Measure Of Liquidity

An assessment of how easily and quickly an asset can be converted into cash without significantly affecting its value.