Factory a Can Reduce Emissions at a Cost of $250

question 178

Multiple Choice

Factory A can reduce emissions at a cost of $250 per ton. Factory B can reduce emissions at a cost of $400 per ton. In a system in which the government issues transferable pollution right at a price of $200 per ton:

• A)​Factory A can profit from selling its pollution rights to Factory B.
• B)​Both firms have an incentive to buy pollution rights.
• C)​Factory B can profit from selling its pollution rights to Factory A.
• D)​Both firms have an incentive to sell pollution rights.

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Definitions:

Differential Carrier Housing

The casing that encloses the differential assembly in a vehicle, providing protection and support for the differential gears.

Lube Level

A measure indicating the amount of lubricant within a particular system or component, ensuring optimal operation and protection against wear and tear.

Oil Hole

A small, designed opening in machinery through which oil is applied for lubrication purposes.

Standard Transmission

A type of gearbox that requires manual operation by the driver to select and engage gears, using a clutch.