Suppose That the EPA Limits the Pollution Level of Two

question 105

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 of the following statements 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:

Earnings

The amount of money that an individual or company receives in return for their labor or investment.

Female/Male Earnings Ratio

The comparison of average earnings between women and men, often used to highlight gender pay disparities.

Professions

are occupations requiring specialized knowledge and often, formal education and qualifications, such as law, medicine, and engineering.

Civil Rights Legislation

Laws enacted to protect individuals from discrimination and ensure equal opportunity, regardless of race, religion, sex, or nationality.