Two Firms, Industrio and Capitalista, Have Access to Five Production

question 69

Multiple Choice

Two firms, Industrio and Capitalista, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. Both firms currently use process A, and each emits 4 tons of smoke per day. The government is considering two plans to reduce pollution: requiring both firms to reduce pollution by 25 percent or auctioning pollution permits. Each permit would entitle the owner to emit one ton of smoke per day. Without a permit, no smoke can be emitted. $$\begin{array} { | c | c | c | c | c | c | } \hline & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \\\hline \text { Process } & \text { (smoke/day) } & \text { (4 tons/day) } & \text { (3 tons/day) } & \text { (2 tons/day) } & \text { (1 tons/day) } \\\hline \text { Cost to Industrio (\$/day) } & \$ 350 & \$ 400 & \$ 500 & \$ 700 & \$ 1,000 \\\hline \text { Cost to Capitalista (\$/day) } & \$ 225 & \$ 250 & \$ 290 & \$ 400 &\$600 \\\hline\end{array}$$ If neither firm had any permits, Industrio would be willing to pay up to ______ for the right to emit 1 ton of smoke, and Capitalista would be willing to pay up to ______ for the right to emit 1 ton of smoke.

• A)$50; $25
• B)$1000, $600
• C)$50, $50
• D)$300, $200

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Definitions:

Earlier Points

Previous arguments, considerations, or stages in a discussion or process.

Postformal Stage

A proposed stage of cognitive development following Piaget's formal operational stage, characterized by the ability to handle ambiguity, contradiction, and complexity in thinking.

Cognitive Development

This refers to the progression of thinking, problem solving, and information processing abilities from childhood through adolescence to adulthood.

Piaget's Work

The theoretical framework developed by Jean Piaget, describing the stages of cognitive development from infancy through adulthood.