Two Firms, a and B, Each Currently Dump 50 Tons

question 371

Multiple Choice

Two firms, A and B, each currently dump 50 tons of chemicals into the local river. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. The government will sell 40 pollution permits for $75 each. It costs Firm A $100 for each ton of pollution that it eliminates before it reaches the river, and it costs Firm B $50 for each ton of pollution that it eliminates before it reaches the river. Neither firm produces any less output, but they both conform to the law. It is likely that between the cost of permits and the cost of additional pollution abatement,

• A)Firm B will spend $3,500.
• B)Firm A will spend $4,000.
• C)Firm A will spend $4,500.
• D)Firm B will spend $3,000.

Explain the importance of loyalty, confidentiality, and safe working conditions in agency relationships.

Understand the legality and implications of actions taken in an agency relationship.

Illustrate the effects of the principal's control over the agent and the significance of independent contractor status.

Comprehend the procedural and legal requirements for agency agreements, including when they must be in writing.

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Definitions:

Government Permits

Official permissions granted by governmental bodies that allow individuals or companies to conduct certain activities that would otherwise be prohibited.

Develop Land

The process of making land suitable for construction or other use, which may involve clearing, grading, and installing infrastructure such as roads and utilities.

Landscaping

The art and practice of designing and maintaining outdoor spaces for aesthetic or functional purposes.

Business Location

The physical or virtual place where a company operates its activities.