Author Question: Factory A can reduce emissions at a cost of 250 per ton. Factory B can reduce emissions at a cost of ... (Read 74 times)

ereecah · **on:** Jun 30, 2018

Factory A can reduce emissions at a cost of 250 per ton. Factory B can reduce emissions at a cost of 400 per ton. In a system in which the government issues transferable pollution right at a price of 200 per ton:
a. Factory A can profit from selling its pollution rights to Factory B.
b. Both firms have an incentive to buy pollution rights.
c. Factory B can profit from selling its pollution rights to Factory A.
d. Both firms have an incentive to sell pollution rights.

Question 2

When restrictions alter the pattern of international trade, the _____ benefit and the _____ suffer(s).
a. domestic consumers; domestic producers
b. domestic consumers; government
c. domestic producers; domestic consumers
d. foreign producers; domestic producers
e. foreign producers; domestic consumers