Use the Following to Answer Questions

question 37

Multiple Choice

Use the following to answer questions:
Exhibit: EPA Regulations
There are two firms: Company A and Company B. The EPA enforces regulations saying that neither firm can release more than 10 units of pollutants. Company A currently releases 10 units and Company B releases 11 units. The EPA requires B to reduce its pollution by 1 unit-the company can do this, but at a cost of $1,000. Company A, however, can reduce pollution by 1 unit for a cost of $400. Company B wants to save money by trading allowances with Company A. After negotiations, Company A agrees to sell one unit of pollutant to Company B for $650.
-(Exhibit: EPA Regulations) Refer to the exhibit. What is the total amount of pollutants released into the environment after the two firms have traded allowances?

• A) 11
• B) 9
• C) 20
• D) 10

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Definitions:

Implicit Assumption

An underlying belief or principle that is accepted without question or evidence.

Hostile Attribution Bias

A cognitive bias leading individuals to interpret others' intentions as malevolent, often in ambiguous situations.

Expressions of Hostility

Behaviors or gestures that convey anger, aggression, or opposition towards others.

Potency Bias

A cognitive bias that leads individuals to overestimate their ability, power, or the effectiveness of their actions.