Suppose an Oil Refinery and a Paper Mill Both Pollute

question 398

Multiple Choice

Suppose an oil refinery and a paper mill both pollute a river. Under a system of marketable pollution permits, which of the following must be true in order for both companies to benefit from trading the right to pollute?

• A)They must be able to reduce pollution at exactly the same cost.
• B)It must cost the firms different amounts to reduce pollution.
• C)They must have a social conscience and must be devoted to pollution abatement.
• D)The government must direct them toward beneficial trades.

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Definitions:

Specific Object

An identifiable entity distinguished by particular characteristics.

Attitudes Function

The role that attitudes play in influencing how we respond to people, objects, and situations.

Behaviour Origin

The source or cause of an individual's actions, often examined in psychology to understand motivations and personality.

Equity Theory

A theory in social psychology that explains how people strive for fairness and justice in social exchanges or give-and-take relationships, balancing the input they provide with the outcomes they receive.