11 May IF FIRM A CONTEMPLATES SELLING ONE PERMIT TO FIRM B, WHAT IS FIRM A’S WILLINGNESS TO ACCEPT?
Table 9.8 shows the production cost for two utilities at different levels of
sulfur dioxide emissions. Assume that the government issued 8 marketable
pollution permits to each firm. If Firm A contemplates selling one permit to
Firm B, what is Firm A’s willingness to accept?
A)
$2,000
B)
$3,000
C)
$4,000
D)
$5,000
28)
Table 9.8 shows the production cost for two utilities at different levels of
sulfur dioxide emissions. Assume that the government issued 8 marketable
pollution permits to each firm. If Firm B wants to purchase a second permit to
be able to discharge 10 tons of sulfur dioxide, what is Firm B’s willingness to
pay?
A)
$2,000
B)
$3,000
C)
$4,000
D)
$5,000
29)
Table 9.8 shows the production cost for two utilities at different levels of
sulfur dioxide emissions. Assume that the government issued 8 marketable pollution
permits to each firm. If Firm A contemplates selling a second permit to Firm B,
what is Firm A’s willingness to accept?
A)
$2,000
B)
$3,000
C)
$4,000
D)
$5,000
30)
Table 9.8 shows the production cost for two utilities at different levels of sulfur
dioxide emissions. Assume that the government issued 8 marketable pollution
permits to each firm. If the two firms were to voluntarily trade pollution
permits, how many permits would be swapped?
A)
0
B)
1
C)
2
D)
3
31)
Suppose two firms operate under a system of marketable pollution permits. If it
costs Firm A $25 to reduce pollution by 1,000 units per day, and Firm B can
reduce costs by $35 by increasing pollution by 1,000 units per day
A)
the firms cannot gain by trading the right to pollute.
B)
both firms can benefit if Firm A trades the right to pollute 1,000 units to
Firm B for $30.
C)
both firms can benefit if Firm A trades the right to pollute 1,000 units to
Firm B for $40.
D)
both firms can benefit if Firm B trades the right to pollute 1,000 units to
Firm A for $30.22)
Table 9.7 shows the production cost for two utilities at different levels of
sulfur dioxide emissions. Assume that the government issued 8 marketable
pollution permits to each firm. If the two firms agree to swap one permit and
split the difference between the willingness to pay and willingness to accept,
what is the price of a permit?A)
$4,500B)
$5,500C)
$7,250D)
$9,750 23)
Table 9.7 shows the production cost for two utilities at different levels of
sulfur dioxide emissions. Assume that the government issued 8 marketable
pollution permits to each firm and that Firm A has sold one permit to Firm B.
If Firm B wants to purchase a second permit to be able to discharge 10 tons of
sulfur dioxide, what is Firm B’s willingness to pay?A)
$2,000B)
$3,000C)
$5,000D)
$9,000 24)
Table 9.7 shows the production cost for two utilities at different levels of
sulfur dioxide emissions. Assume that the government issued 8 marketable
pollution permits to each firm. Suppose that Firm A has already sold a permit
to Firm B. If Firm A contemplates selling a second permit to Firm B, what is
Firm A’s willingness to accept?A)
$5,000B)
$6,000C)
$7,000D)
$8,000 25)
Table 9.7 shows the production cost for two utilities at different levels of
sulfur dioxide emissions. Assume that the government issued 8 marketable
pollution permits to each firm. If the two firms were to voluntarily trade
pollution permits, how many permits would be swapped?A)
1B)
2C)
3D)
4 Sulfur Dioxide
Discharged (Tons)Firm AFirm B10$10,000$12,000911,00017,000813,00022,000716,00026,000620,00033,000Table
9.826)
Table 9.8 shows the production cost for two utilities at different levels of
sulfur dioxide emissions. Assume that the government issued 8 marketable
pollution permits to each firm. If Firm B would like to purchase one permit to
be able to discharge 9 tons of sulfur dioxide, what is Firm B’s willingness to
pay?A)
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