Once Tradable Pollution Permits Have Been Allocated to Firms

question 43

Multiple Choice

Once tradable pollution permits have been allocated to firms,

• A)the government controls the price of permits.
• B)firms that can reduce pollution only at high cost will be willing to pay the most for the pollution permits.
• C)the value of pollution-saving technology will be lower than the market value of a pollution permit.
• D)the Coase theorem is no longer applicable as a solution to reducing pollution.

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Definitions:

Inventory Turnover

A measure of how quickly a company sells its inventory within a specific period, indicating the efficiency of inventory management.

Dividend Yield

An indicator that illustrates the yearly dividend payout of a company against its stock price.

Gross Margin Ratio

A financial metric indicating the percentage of sales revenue remaining after deducting the cost of goods sold, serving as a measure of a company's production efficiency and pricing strategy.

Operating Activity

Activities that constitute the primary or core business functions, including sales and service provision, and their related expenses, generating most of the company's cash flows.