If Stricter Regulations Are Used to Reduce Pollution Then

question 30

Multiple Choice

If stricter regulations are used to reduce pollution then:

• A)everyone will benefit so there is no trade-off
• B)only firms that polluted will be affected
• C)there will be no trade-off as the firms can afford to reduce pollution
• D)incomes of these firm's owners, workers and customers will be affected, and this means a trade-off must result

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Definitions:

Marginal Cost

The rise in total expenses incurred from the production of an extra unit of a product or service.

Profit-maximizing Output

The level of production at which a firm achieves the highest possible profit, where marginal revenue equals marginal cost.

Higher Prices

An increase in the cost that consumers must pay to purchase goods or services.

Income Redistribution

The transfer of income from certain individuals or groups to others through mechanisms like taxes, welfare programs, and subsidies, aimed at reducing economic inequality.