USU-Intro To MacroEcon - Assignment 11

The government using a subsidy to encourage a

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Unformatted text preview: e of 1. the government using a subsidy to encourage a negative externality 2. a marketable pollution permit 3. the government using the command approach to discourage a negative externality 4. a pollution tax 5. the government using the command approach to encourage a positive externality Question 8 (1 point) S uppose that the current price of a marketable permit to emit one ton of gunk is $60. For firm A, the marginal cost of reducing one more ton of gunk is $50. For firm B, the marginal cost of reducing one ton of gunk is $70. Under a marketable permit system, 1. both firms will buy a permit and emit one more ton of gunk 2. both firms will shut down 3. firm A will buy a permit and emit one more ton of gunk, while firm B will reduce its emissions of gunk by one ton 4. both firms will reduce their emissions of gunk by one...
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This homework help was uploaded on 03/18/2014 for the course ECON 2010 taught by Professor Staff during the Spring '08 term at Utah Valley University.

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