A plant uses machinery and waste water to produce steel. The owner of the plant wants to maintain an output of 10,000 tons a day, even though the government has just imposed a 100 per gallon tax on using waste water.
The reduction in the amount of waste water that results from the imposition of this tax depends on A) the amount of waste water used before the tax was imposed.
B) the cost to the firm of using waste water before the tax was put in place.
C) the rental rate of machinery.
D) the marginal product of waste water only.
E) the ratio of the marginal product of waste water to the marginal product of machinery.
Question 2
The price of on-campus parking from 8:00 AM to 5:00 PM, Monday through Friday, is 3.00. From 5:00 PM to 10:00 PM, Monday through Friday, the price is 1.00. At all other times parking is free. This is an example of
A) bundling.
B) second-degree price discrimination.
C) a two-part tariff.
D) tying.
E) none of the above
Plant
Plant
Water Molecules
Process flow diagram for Acetic Anhydride Plant
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