Suppose That There Are Two Firms, Each Generating Three Tons

question 19

Multiple Choice

Suppose that there are two firms, each generating three tons of SO₂. Suppose also that the government has set a target abatement level of two tons. Under a policy of uniform abatement with permits the firm with the lower marginal abatement cost

• A) will abate exactly the same amount of SO₂ as the firm with the higher marginal abatement cost.
• B) will abate less SO₂ than the firm with the higher marginal abatement cost.
• C) will abate more SO₂ than the firm with the higher marginal abatement cost.
• D) will sell its pollution permit to the firm with the higher marginal abatement cost.

---

Definitions:

Antibiotic

Medicinal drugs used to fight bacterial infections by killing or inhibiting the growth of bacteria.

Tyrosine

An amino acid that is important in the synthesis of proteins and neurotransmitters within the body.

Sulfa

Refers to sulfonamides, a group of antibiotics that are used to treat bacterial infections by inhibiting bacterial growth.

Pathologic State

A condition or phase of disease differing from normal health due to the presence of pathological processes.