The Paper Industry and Brewery Industry Each Emit 60 Tons

question 141

Multiple Choice

The paper industry and brewery industry each emit 60 tons of particulates into the air. It costs the paper industry $1,000 to remove 1 ton of particulates and it costs the brewery industry $1,400 to remove 1 ton of particulates. In an effort to reduce particulate pollution, the government gives each industry tradeable allowances worth 50 tons of particulates. We would expect that:

• A) the paper industry will buy tradeable allowances from the brewery industry at a cost between $1,000 and $1,400 per allowance.
• B) the paper industry will buy tradeable allowances from the brewery industry at a cost greater than $1,400 per allowance.
• C) the brewery industry will buy tradeable allowances from the paper industry at a cost between $1,000 and $1,400 per allowance.
• D) the brewery industry will buy tradeable allowances from the paper industry at a cost greater than $1,400 per allowance.

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Definitions:

Promises Under Seal

Legally binding agreements marked with a seal, signifying a formal commitment beyond a standard contract.

UCC

Stands for the Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States.

Unconscionable

Describing actions or conditions that are so unfair or immoral that they shock the conscience, often leading to legal invalidation.

Fair Market Value

The price that property would sell for on the open market, reflecting the amount a willing buyer would pay a willing seller when neither is under pressure to buy or sell.