Two Firms Can Choose from Five Different Technologies to Reduce

question 62

Multiple Choice

Two firms can choose from five different technologies to reduce their pollution: A,B,C,D and E.The amount of pollution emitted by each technology and the cost of the technologies are shown in the table.Both firms have adopted technology A and currently emit 4 tons apiece.The government is considering two plans to reduce pollution: a 50% reduction by both firms or selling pollution permits.One permit entitles the owner to emit one ton of pollution.Without a permit,no pollution can be emitted.
$$\begin{array} { l c c c c c } & \mathrm { A } : & \mathrm { B } : & \mathrm { C } : & \mathrm { D } : & \mathrm { E } : \\& 4 \text { tons } & 3 \text { tons } & 2 \text { tons } & 1 \text { ton } & \text { no pollution } \\\text { Industrio } & \$ 350 & \$ 400 & \$ 500 & \$ 700 & \$ 1000 \\\text { Capitalista } & \$ 225 & \$ 250 & \$ 290 & \$ 400 & \$ 600\end{array}$$
A government regulation that requires both firms to reduce pollution by 50% results in process ___________ being adopted and the private costs are __________.

• A)A;$575
• B)B;$650
• C)C;$790
• D)D;$1100

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Definitions:

Default

Failure to fulfill an obligation, especially failure to meet a financial obligation or appear in a legal action.

Time of Attachment

The specific moment at which an interest in property becomes legally enforceable against other parties.

Amount of the Claim

The total sum of money that is being requested or is due in a billing or legal claim.

Custom in the Trade

Established practices and standards widely recognized and accepted within a particular industry.