.jpg”> Table 9.5 12) Given the data in Table 9.5, if Firm A were to reduce pollution from 1,000..

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Table 9.5

12)
Given the data in Table 9.5, if Firm A were to reduce pollution from 1,000
gallons of wastewater per day to 0 gallons per day, production costs
A)
would increase by $12.
B)
would decrease by $12.
C)
would not change.
D)
cannot be calculated from the information above.

13)
If each firm depicted in Table 9.5 is currently generating 1,000 gallons of
wastewater per day, Firm B would be willing to pay up to ________ to Firm A to
be able to generate 2,000 gallons of wastewater per day.
A)
$15
B)
$20
C)
$35
D)
$120

14)
If each firm depicted in Table 9.5 is currently generating 1,000 gallons of
wastewater per day, Firm A would need to be paid at least ________ from Firm B
to reduce wastewater production to 0 gallons per day.
A)
$20
B)
$15
C)
$12
D)
$3

15)
Both firms depicted in Table 9.5 can benefit if Firm A sells its pollution
permit allowing it to generate 1,000 gallons of wastewater to Firm B for
A)
a price between $12 and $15.
B)
a price between $0 and $6.
C)
a price greater than $20.
D)
It is not possible for firms to benefit if Firm A sells a permit to Firm B.

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Table 9.6

16)
Given the data in Table 9.6, if Firm A were to reduce pollution from 100
gallons of wastewater per day to 0 gallons per day, production costs
A)
would increase by $7.
B)
would decrease by $7.
C)
would not change.
D)
cannot be calculated from the information above.

17)
Consider the data in Table 9.6. If each firm is currently generating 100
gallons of wastewater per day, Firm B would be willing to pay up to ________ to
Firm A to be able to generate 200 gallons of wastewater per day.
A)
$10
B)
$12
C)
$28
D)
$200

18)
Consider the data in Table 9.6. If each firm is currently generating 100
gallons of wastewater per day, Firm A would need to be paid at least ________
from Firm B to reduce wastewater production to 0 gallons per day.
A)
$12
B)
$10
C)
$7
D)
$5

19)
Consider the data in Table 9.6. Both firms can benefit if Firm A sells its
pollution permit allowing it to generate 100 gallons of wastewater to Firm B
for
A)
a price between $7 and $12.
B)
a price between $0 and $7.
C)
a price between $12 and $18.
D)
Both firms cannot benefit if A sells permits to B.

Sulfur Dioxide
Discharged (Tons)

Firm A

Firm B

10

$8,000

$9,000

9

10,000

12,000

8

15,000

18,000

7

20,000

27,000

6

28,000

37,000

Table
9.7

20)
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 Firm B would like to purchase one permit to
be able to discharge nine tons of sulfur dioxide, what is Firm B’s willingness
to pay?
A)
$2,000
B)
$5,000
C)
$6,000
D)
$9,000

21)
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 Firm A contemplates selling one permit to
Firm B, what is Firm A’s willingness to accept?
A)
$3,000
B)
$5,000
C)
$6,000
D)
$7,000

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