Once Tradeable Pollution Permits Have Been Allocated to Firms

question 177

Multiple Choice

Once tradeable pollution permits have been allocated to firms:

• A)the government controls the price of permits
• B)firms that can reduce pollution only at high cost will be willing to pay the most for the pollution permits
• C)the value of pollution saving technology is always lower than the market value of a pollution permit
• D)the total amount of pollution governed by the permit will always decrease

Interpret economic models and data tables to calculate profit, loss, and optimal production levels.

Distinguish between short-run and long-run decision-making for firms in competitive markets.

Recognize the role of market price in a firm's revenue and cost calculations.

Explain the impact of market demand changes on firm profits in price-taker markets.

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Definitions:

Indorsement

The act of signing one's name on the back of a check or other negotiable instrument for the purpose of transferring ownership or authorizing its use by someone else.

Payable to Order

A financial term indicating that a payment should be made to a specific individual or entity whose name appears on the document.

Drawer

In banking and finance, the person who writes or issues a check or draft, instructing the bank to pay a specified amount to the person or entity named.

Contractual Capacity

The legal ability to enter into a binding contract, typically requiring parties to be of a certain age and sound mind.