Two Firms Can Use Five Different Technologies to Produce the Same

question 39

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. $\begin{array}{lllll}\text { Technology } & 1 & 2 & 3 & 4 & 5 \\\text { Emissions } & 10 \text { tons } & 8 \text { tons } & 6 \text { tons } & 4 \text { tons } & 2 \text { tons } \\\text { Acme's Costs } & \$ 750 & \$ 800 & \$ 1000 & \$ 1400 & \$ 2000 \\\text { FirmCo's Costs } & \$ 500 & \$ 700 & \$ 1200 & \$ 2200 & \$ 4000\end{array}$
In the absence of either government regulation or private negotiation,the 2 firms will produce using technology __________ and pollution will be __________.

• A) 3;12 tons
• B) 5;4 tons
• C) 2;16 tons
• D) 1;20 tons

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