Both Firm a and Firm B Emit 300 Tonnes of Pollution

question 122

Multiple Choice

Both firm A and firm B emit 300 tonnes of pollution. Suppose both firm A and firm B have permits that allow each to emit 100 tonnes of pollution. If it costs $5,000 for firm A to eliminate 100 tonnes of pollution and it costs firm B $6,000 to eliminate 100 tonnes of pollution, then

• A) firm B will sell its permits to firm A for a price below $6,000.
• B) firm A will sell its permits to firm B for a price above $6,000.
• C) firm B will sell its permits to firm A for a price above $6,000.
• D) firm A will sell its permits to firm B for a price below $6,000.

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Definitions:

Stimulants

Substances that increase alertness, attention, and energy by elevating the levels of certain chemicals in the brain.

Maze Learning

A method used in cognitive psychology and animal behavior studies to assess spatial learning and memory.

McGaugh's Studies

Research conducted by James McGaugh focusing on the role of emotions and the amygdala in memory formation.

Traumatic Memories

Memories that are associated with trauma, which are often vivid, distressing, and enduring over time, potentially leading to conditions like PTSD.