Author Question: Anyone can purchase sulfur dioxide emission allowances on the Chicago Mercantile Exchange. Several ... (Read 144 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 average person is easily confused by the terms pharmaceutics and pharmacology, thinking they are one and the same. Whereas pharmaceutics is the science of preparing and dispensing drugs (otherwise known as the science of pharmacy), pharmacology is the study of medications.

Did you know?

Colchicine is a highly poisonous alkaloid originally extracted from a type of saffron plant that is used mainly to treat gout.

Did you know?

Human kidneys will clean about 1 million gallons of blood in an average lifetime.

Did you know?

Tobacco depletes the body of vitamins A, C, and E, which can result in any of the following: dry hair, dry skin, dry eyes, poor growth, night blindness, abscesses, insomnia, fatigue, reproductive system problems, sinusitis, pneumonia, frequent respiratory problems, skin disorders, weight loss, rickets, osteomalacia, nervousness, muscle spasms, leg cramps, extremity numbness, bone malformations, decayed teeth, difficulty in walking, irritability, restlessness, profuse sweating, increased uric acid (gout), joint damage, damaged red blood cells, destruction of nerves, infertility, miscarriage, and many types of cancer.

Did you know?

The lipid bilayer is made of phospholipids. They are arranged in a double layer because one of their ends is attracted to water while the other is repelled by water.

For a complete list of videos, visit our video library