Two Firms Can Use Five Different Technologies to Produce the Same

question 57

Multiple Choice

Two firms can use five different technologies to produce the same quantity of output: 1,2,3,4 and 5.The first technology is the cheapest,but also the dirtiest.The fifth technology is the most expensive,but results in the lowest levels of pollution.The amount of pollution emitted by each firm and the cost of the technologies are shown in the table. $$\begin{array} { l r l l l l } \text { Technology } & 1 & 2 & 3 & 4 & 5 \\\text { Emissions } & 10 \text { tons } & 8 \text { tons } & 6 \text { tons } & 4 \text { tons } & 2 \text { tons } \\\text { Acme's Costs } & \$ 750 & \$ 800 & \$ 1000 & \$ 1400 & \$ 2000 \\\text { FirmCo's Costs } & \$ 500 & \$ 700 & \$ 1200 & \$ 2200 & \$ 4000\end{array}$$
Suppose that the government imposes a tax of $150 per ton of pollution.As a result,Acme adopts technology __________,and FirmCo adopts technology _______.

• A)2;1
• B)3;2
• C)3;3
• D)4;3

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Definitions:

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Enclosed Fence

A barrier surrounding an area to prevent entry or exit, typically made from materials like wood, metal, or wire.

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Punitive Damages

Monetary compensation awarded in court cases that goes beyond what the injured party lost, intended to punish the wrongdoer.