Suppose That the EPA Limits the Pollution Level of Two

question 216

Multiple Choice

Suppose that the EPA limits the pollution level of two firms, firm High with high cost of reducing pollution and firm Low with low cost of reducing pollution. Which statement is correct?

• A) The EPA should limit both firms' pollution to the same level.
• B) The EPA should limit High's pollution level to a lower level than Low's in an attempt to entice High to find more efficient ways to lower its costs.
• C) The EPA should allow Low to increase its pollution level and trade with High who would cut its pollution to lower than the required level.
• D) The EPA should allow High to increase its pollution level and trade with Low who would cut its pollution to lower than the required level.

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Definitions:

Ventromedial Hypothalamus

A region of the brain that plays a critical role in regulating satiety, metabolism, and body weight.

Set Point

The point at which an individual’s “weight thermostat” is supposedly set. When the body falls below this weight, an increase in hunger and a lowered metabolic rate may act to restore the lost weight.

Body Weight

The quantitative measurement of the mass or heaviness of an individual's body, often used as an indicator of health status.

Lateral Hypothalamus

A region of the brain that plays a key role in hunger regulation and the initiation of eating behaviors as part of the hypothalamus.