If Pollutants Emitted by Firms in the Steel Industry Increase

question 55

Multiple Choice

If pollutants emitted by firms in the steel industry increase, but there is no increase in the costs borne by these firms, you could conclude that

• A) pollution is not a serious problem in this industry.
• B) the consumers of steel are unwilling to bear the costs of pollution generated from steel production.
• C) pollution is an externality in this market, since producers and purchasers of steel do not bear the full costs of the pollution.
• D) pollution creates an external benefit rather than an external cost in this case.

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Definitions:

Upper Control Limit

The highest value on a control chart that signals the process is in control and within set parameters.

Sample Proportion

The fraction or percentage of individuals or items in a subset of a population that meet a specified criterion, used to estimate the true proportion.

Sample Proportions

A statistic that represents the fraction of individuals in a sample that possess a certain attribute or characteristic.

Control Limits

Boundaries that define the range of acceptable variation in a process.