-Producing Leather Creates External Costs in the Form of Water

question 118

Multiple Choice

-Producing leather creates external costs in the form of water pollution.The figure above illustrates the market for leather.If the government sets a pollution limit that achieves efficiency,how many tons of leather are produced?

• A) 0 tons
• B) 200 tons
• C) 300 tons
• D) more than 300 tons
• E) more than 0 tons and less than 200 tons

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Definitions:

Corporations

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Preincorporation Contracts

Agreements entered into by the promoters of a company on its behalf before the company has been legally formed.

Promoters

Individuals or groups who initiate and assist in the formation and organization of a corporation, often engaging in securing capital, compliance with legal requirements, and bringing together the initial management.

Passive Investor

An individual or entity that invests in stocks, bonds, or other investments without taking an active role in the management or their investment decisions.