Author Question: Anyone can purchase sulfur dioxide emission allowances on the Chicago Mercantile Exchange. Several ... (Read 128 times)

elizabeth18

  • Hero Member
  • *****
  • Posts: 559
Anyone can purchase sulfur dioxide emission allowances on the Chicago Mercantile Exchange. Several environmental groups have raised money to buy allowances (which they subsequently destroy).
 
  As part of their fund-raising, these groups have urged contributors to buy the allowances as gifts. As one newspaper story put it, For the environmentalist in your life, here's a gift that is sold by the ton, fits in an envelope and will last forever.
  Source for quote: Randall Edwards, Dear Santa: Please Bring Me Sulfur Dioxide for Christmas, Columbus Dispatch, December 19, 1999.
 
  What would be the impact on the price of the emission allowances in the market if more people buy sulfur emission allowances and destroy them?
  A) The price falls to zero.
  B) The price rises.
  C) The price falls but not to zero.
  D) The price remains unchanged because the allowances purchased by the environmental groups are destroyed.

Question 2

If a firm has an incentive to increase supply now and decrease supply in the future, then the firm expects that the
 
  A) demand for the product will be lower in the future than it is today.
  B) price of its product will be higher in the future than it is today.
  C) price of its product will be lower in the future than it is today.
  D) price of inputs will be lower in the future than they are today.


bhavsar

  • Sr. Member
  • ****
  • Posts: 351
Answer to Question 1

B

Answer to Question 2

C



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

The most dangerous mercury compound, dimethyl mercury, is so toxic that even a few microliters spilled on the skin can cause death. Mercury has been shown to accumulate in higher amounts in the following types of fish than other types: swordfish, shark, mackerel, tilefish, crab, and tuna.

Did you know?

Street names for barbiturates include reds, red devils, yellow jackets, blue heavens, Christmas trees, and rainbows. They are commonly referred to as downers.

Did you know?

Oxytocin is recommended only for pregnancies that have a medical reason for inducing labor (such as eclampsia) and is not recommended for elective procedures or for making the birthing process more convenient.

Did you know?

Egg cells are about the size of a grain of sand. They are formed inside of a female's ovaries before she is even born.

Did you know?

Stroke kills people from all ethnic backgrounds, but the people at highest risk for fatal strokes are: black men, black women, Asian men, white men, and white women.

For a complete list of videos, visit our video library