Two Firms Can Choose from Five Different Technologies to Reduce

question 6

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.
$\begin{array}{lccccc} & \text { A: } & \text { B: } & \text { C: } & \text { D: } & \text { E: } \\& 4 \text { tons } & 3 \text { tons } & 2 \text { tons } & 1 \text { ton } & \text { no pollution } \\\text { Industrio } & \$ 350 & \$ 400 & \$ 500 & \$ 700 & \$ 1000 \\\text { Capitalista } & \$ 225 & \$ 250 & \$ 290 & \$ 400 & \$ 600\end{array}$
The ultimate equilibrium price of six permits is __________ with Industrio buying __________ and Capitalista buying __________.

• A) $100;3;3
• B) $110;2;4
• C) $50;4;2
• D) $300;3;3

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Definitions:

Naturalistic Observation

A method of research in which people are examined in their usual environments with no alterations made by the observer.

Representative Samples

A subset of a population that accurately reflects the members of the entire population, useful in statistical analysis and research.

Generalizations

Broad statements or conclusions that apply to many instances, often derived from observations or experiments.

Confounding Variables

External factors in an experiment that can affect the outcome, potentially misleading the relationship between the variables being studied.