Which of the Following Is a Market-Based Alternative to the Kansas

question 157

Multiple Choice

Which of the following is a market-based alternative to the Kansas state government's approach to reduce earthquakes as described in the textbook?

• A) Impose a tax according to the amount of saltwater injected
• B) Impose a tax according to the number of earthquakes
• C) Pay a subsidy to homeowners whose houses are damaged by earthquakes
• D) Pay a subsidy to oil companies to develop an extraction technology that requires less saltwater

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Definitions:

Contribution Margin

The difference between the sales revenue of a company and its variable costs.

Fixed Budget

A budget that remains unchanged and is based on a fixed level of activity, regardless of actual levels of output, sales, or revenue throughout the budget period.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing for more accurate financial planning and analysis.

Contribution Margin

The difference between sales revenue and variable costs, showing how much revenue contributes to covering fixed costs.