Two firms, Industrio and Capitalista, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. Both firms currently use process A, and each emits 4 tons of smoke per day. The government is considering two plans to reduce pollution: requiring both firms to reduce pollution by 25 percent or auctioning pollution permits. Each permit would entitle the owner to emit one ton of smoke per day. Without a permit, no smoke can be emitted. Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Industrio ($/day) $350$400$500$700$1,000 Cost to Capitalista
($/day) $225$250$290$400 $600Suppose a permit system has been adopted and each firm has already purchased one permit. Industrio would be willing to pay up to ________ for the right to emit a second ton of smoke, and Capitalista would be willing to pay up to ________ for the right to emit a second ton of smoke.
A. $200; $110
B. $200; $300
C. $100; $40
D. $500; $290
Answer: A
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Figure 18-3
displays the international currency market for yen in terms of dollars and dollars in terms of yen. The supply curve in graph (B) is comprised of
a.
U.S. citizens attempting to purchase Japanese-made goods.
b.
Japanese attempting to purchase U.S.-made goods.
c.
U.S. businesses attempting to sell to the Japanese.
d.
Japanese businesses attempting to sell to the U.S.
e.
the U.S. government attempting to unload dollars to the international market.
Investment increases when there ________ stock prices.
A. a consolidation of B. are deflated C. is a run up in D. are overvalued