The Diagram Below Shows the Marginal Cost of Abatement for Each

question 114

Multiple Choice

The diagram below shows the marginal cost of abatement for each of two firms,A and B.Each firm is initially abating Q₀ units of pollution. FIGURE 17-7
-Refer to Figure 17-7.Suppose that a system of tradable pollution permits is introduced into this market and the equilibrium permit price is .Firm A will sell permits to Firm B because

• A)Firm A's total cost of abating more pollution (areas 5 + 6)is less than the revenue it earns from selling the permits (areas 4 + 5 + 6).
• B)Firm B has lower costs of pollution abatement than Firm A.
• C)Firm A can buy the permits at a lower price than Firm B.
• D)the revenue Firm A earns from selling permits (areas 5 + 6)is greater than the cost it incurs from abating more pollution (area 6).
• E)Firm A's total cost of abating more pollution (area 6)is less than the revenue it earns from selling the permits (area 4 + 5).

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Definitions:

Emotional Empathy

The capacity to recognize and, to some extent, share feelings that are being experienced by another sentient being.

Emotional Intelligence

The ability to understand, use, and manage one's own emotions in positive ways to relieve stress, communicate effectively, empathize with others, overcome challenges, and defuse conflict.

Cognitive Empathy

The capacity to understand another person's perspective or mental state without necessarily sharing their emotions.

Cognitive Dissonance

The psychological discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time.