Refer to the Accompanying Figure

question 87

Multiple Choice

Refer to the accompanying figure. At what price would there be the least pressure to form a black market?

• A) $5
• B) $8
• C) $13
• D) $15
• E) $20

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Definitions:

Tradable Pollution Permits

Government-issued allowances that give the holder the right to emit a specific amount of pollutants; these permits can be bought and sold, creating a market for pollution control.

Emitted Emissions

The pollutants released into the environment as a byproduct of economic activity, such as manufacturing or transportation.

Mercury

A heavy, silvery d-block element that is the only metallic element that is liquid at standard conditions for temperature and pressure.

Tradable Pollution Permits

A market-based approach to controlling pollution by offering a limited number of permits that allow the holder to emit a certain amount of pollutants, which can be bought and sold.