The Following Table Shows Four Firms, the Amount Each Pollutes

question 152

Multiple Choice

The following table shows four firms, the amount each pollutes, the marginal cost for each firm to clean up pollution, and the total cost to each firm of eliminating all pollution. $$\begin{array} { | c | c | c | c | } \hline \text { Firm } & \begin{array} { c } \text { Total Discharge (in } \\\text { tons) }\end{array} & \begin{array} { c } \text { Marginal Cost of } \\\text { Cleanup } \\\text { (per tan) }\end{array} & \begin{array} { c } \text { Total Cost of } \\\text { Cleanup }\end{array} \\\hline \text { A } & 60 & \$ 5.00 & \$ 300 \\\hline \text { B } & 70 & \$ 8.00 & \$ 560 \\\hline \text { C } & 80 & \$ 7.50 & \$ 600 \\\hline \text { D } & 90 & \$ 4.00 & \$ 360 \\\hline\end{array}$$ The total discharge of these four companies is 300 tons. Assume there is no one else who pollutes and these firms want to maximize profits. If the government wishes to cut discharge by 50 percent, it could do so by establishing an effluent fee of:

• A)$3.00 per ton.
• B)$4.50 per ton.
• C)$5.50 per ton.
• D)$10.00 per ton.

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Definitions:

German Jews

Refers to the Jewish community in Germany, which has a long history but faced persecution, culminating in the Holocaust during World War II.

Bankers and Jewelers

Bankers and Jewelers typically refers to professionals in the finance and luxury goods sectors, highlighting their roles in managing and trading wealth and valuable items.

Frankfurt Parliament

The Frankfurt Parliament was an assembly convened in 1848 in Frankfurt, aiming to unify the German states and create a constitution for a unified Germany.

Upper-middle-class

A social class in society that is above the middle class, often including professionals, managers, and business owners who enjoy high economic status and cultural influence.