Suppose There Are Three Power-Generating Plants, Each of Which Has

question 64

Multiple Choice

Suppose there are three power-generating plants, each of which has access to 5 different production processes. The table below summarizes the cost of each production process and the corresponding number of tons of smoke emitted each. $\begin{array}{|c|c|c|c|c|c|}\hline \text { Process } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \\\text { (smoke/day) } & \text { (4 tons/day) } & \text { (3 tons/day) } & \text { (2 tons/day) } & (1 \text { ton/day) } & \text { (0 tons/day) } \\\hline \text { Cost to Firm } X(\$ / \text { day) } & \$ 500 & \$ 514 & \$ 530 & \$ 555 & \$ 585 \\\hline \text { Cost to Firm Y (\$/day) } & \$ 400 & \$ 420 & \$ 445 & \$ 480 & \$ 520 \\\hline \text { Cost to Firm Z(\$/day) } & \$ 300 & \$ 325 & \$ 360 & \$ 400 & \$ 550 \\\hline\end{array}$
If pollution is unregulated, then total daily smoke emission will be ______ tons.

• A)4
• B)12
• C)9
• D)8

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Definitions:

Amortization

The process of spreading out a loan's payments over time, often relating to intangible assets as well.

Boot

A non-cash item given or received in a transaction to even out the value exchange, commonly used in the context of trade or real estate deals.

Similar Asset

An asset that has comparable characteristics and functionality to another asset, often considered when evaluating replacements or equivalents.

Trade-In Allowance

The amount a seller allows a buyer for a fixed asset that is traded in for a similar asset.