Two Firms, a and B, Each Currently Dump 20 Tons

question 244

Multiple Choice

Two firms, A and B, each currently dump 20 tons of chemicals into the local river. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. The government gives each firm 10 pollution permits, which it can either use or sell to the other firm. It costs Firm A $100 for each ton of pollution that it eliminates before it reaches the river, and it costs Firm B $50 for each ton of pollution that it eliminates before it reaches the river. After the two firms buy or sell pollution permits from each other, we would expect that

• A)Firm A will no longer pollute, and Firm B will not reduce its pollution at all.
• B)Firm B will no longer pollute, and Firm A will not reduce its pollution at all.
• C)Firm A will dump 10 tons of pollution into the river, and Firm B will dump 10 tons of pollution into the river.
• D)Firm A will increase its pollution and Firm B will reduce its pollution.

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Definitions:

Implicit Memory

A type of long-term memory that is not consciously recalled but influences thoughts, behaviors, and skills without one's awareness.

Retrieval Cue

Stimuli or hints that can help in the recall of memories by making them more accessible.

Semantic Network Activation

Semantic Network Activation refers to the process by which activating one concept in memory makes related concepts more easily accessible.

Method of Loci

A mnemonic device that involves visualizing items to be remembered in specific locations within an imaginary or real physical space.