Table 10-3 the Following Table Shows the Marginal Costs for Each of Each

question 64

Multiple Choice

Table 10-3
The following table shows the marginal costs for each of four firms (A,B,C,and D) to eliminate units of pollution from their production processes.For example,for Firm A to eliminate one unit of pollution,it would cost $54,and for Firm A to eliminate a second unit of pollution it would cost an additional $67.

-Refer to Table 10-3.Suppose the government wants to reduce pollution from 16 units to 8 units and auctions off 8 pollution permits to achieve this goal.Which of the following is a likely auction price of the permits?

• A) $69
• B) $81
• C) $83
• D) $97

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Definitions:

Forward Exchange Rate

A predetermined rate for exchanging one currency for another at a future date, used primarily to hedge against currency risk.

Monetary Policies

Strategies and actions taken by central banks to control the supply of money in the economy, typically impacting interest rates and aiming to maintain price stability and achieve economic growth.

Currency Supply

The total amount of money available within an economy at any given time, including cash, coins, and bank balances.

Price Stability

The situation in an economy when prices do not change much over time, minimizing uncertainty and fostering a conducive environment for economic planning.