There Are Two Plants (A and B) in an Industry

question 127

Multiple Choice

There are two plants (A and B) in an industry.To reduce pollution, the government has imposed environmental standards forcing each plant to cut emissions by 60%.At the emissions standard, the marginal social benefit of pollution for plant A is $500, and the marginal social benefit of pollution for plant B is $125.The same level of pollution can be achieved at a lower cost by:

• A)forcing plant A to reduce emissions and allowing plant B to increase emissions.
• B)allowing plant A to pollute more and plant B to pollute less.
• C)forcing both plants to reduce emissions.
• D)allowing both plants to pollute more.

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Definitions:

Economic Criteria

Standards or benchmarks used to evaluate the economic performance or viability of a decision, investment, or project.

Theory Y Management

A management style based on the belief that employees are inherently motivated and can exercise self-direction and control when they are committed to objectives.

Deficit Principle

A concept that suggests individuals are less motivated to pursue a need once it has been substantially satisfied.

Maslow's Theory

A psychological theory proposed by Abraham Maslow, outlining a hierarchy of human needs from basic physiological needs to self-actualization.