In Some Industries,pollution Rights Are Sold from One Company That

question 18

Multiple Choice

In some industries,pollution rights are sold from one company that does not need them to another that does.In recent years,conservation groups have purchased pollution rights so that they cannot be traded.Companies in need of pollution rights will find that:

• A)the supply of pollution rights has increased.
• B)the prices of pollution rights have fallen.
• C)the relative costs of pollution control equipment have gone up.
• D)the supply of pollution rights has declined.

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Definitions:

Equivalent Variation

A measure in economics that calculates the change in income required to reach the utility level before a price change, keeping the new prices constant.

Earrings

Are jewelry or ornaments worn attached to the earlobes or through holes pierced in the ears, available in various designs and materials.

Utility Function

An economic model representing the preferences of an individual or entity over a set of goods or services, quantifying satisfaction or utility derived from consumption.

Compensating Variation

A measure of the change in income that would leave a consumer's utility unchanged before and after a change in price or economic environment.