Refer to the Information in Figure 16

question 26

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's emissions would ________ and Beta's emissions would ________.

• A) increase by 50 tons; decrease by 50 tons
• B) decrease by 50 tons; decrease by 50 tons
• C) increase by 25 tons; decrease by 25 tons
• D) decrease by 25 tons; increase by 25 tons

---

Definitions:

Standard of Living

measures the wealth, comfort, material goods, and necessities available to a certain socioeconomic class or a geographic area.

Barter

An exchange system where goods and services are traded directly without the use of money as a medium.

Adam Smith

was an 18th-century Scottish economist and philosopher, best known for his works on the principles of free market economies.

Scottish Professor

Refers to academics from Scotland, particularly notable in areas such as philosophy, economics, and history, though not a specific individual or designation.