10-21-2012 at 06:22 PM
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#1
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Micro Econ Question
Hey I'm having some trouble with this question does anybody know?
When one firm sells its pollution permit to another firm, which of the following will MOST likely occur?
A) Only one firm benefits.
B) The total amount of pollution remains the same.
C) Social welfare is unaffected.
D) Over time, pollution will be eliminated.
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10-21-2012 at 06:49 PM
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#2
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Quote:
Originally Posted by jasmineb
Hey I'm having some trouble with this question does anybody know?
When one firm sells its pollution permit to another firm, which of the following will MOST likely occur?
A) Only one firm benefits.
B) The total amount of pollution remains the same.
C) Social welfare is unaffected.
D) Over time, pollution will be eliminated.
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post on avenue. |
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10-21-2012 at 09:28 PM
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#3
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Quote:
Originally Posted by jasmineb
Hey I'm having some trouble with this question does anybody know?
When one firm sells its pollution permit to another firm, which of the following will MOST likely occur?
A) Only one firm benefits.
B) The total amount of pollution remains the same.
C) Social welfare is unaffected.
D) Over time, pollution will be eliminated.
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Total pollution would increase I think so not B, not D and probably not A. I would say C. |
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10-21-2012 at 10:27 PM
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#4
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Quote:
Originally Posted by ykv23
Total pollution would increase I think so not B, not D and probably not A. I would say C.
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that doesn't make much sense. If total pollution increases, social welfare would be negatively effected. The answer is likely B. When a permit system is used there exists a total amount of allocated pollution. Selling the permit transfers rights to pollute but doesn't change the aggregate quantity. |
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10-21-2012 at 11:45 PM
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#5
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Quote:
Originally Posted by fasailuddin
that doesn't make much sense. If total pollution increases, social welfare would be negatively effected. The answer is likely B. When a permit system is used there exists a total amount of allocated pollution. Selling the permit transfers rights to pollute but doesn't change the aggregate quantity.
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I got B) as my answer as well. It's the right answer, I just did the econ bonus quiz.
Last edited by Swampis : 10-21-2012 at 11:57 PM.
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10-22-2012 at 09:02 AM
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#6
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You should really read the slides, I remember doing these Qs last year. Its a joke once you read the slides.
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10-22-2012 at 09:39 AM
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#7
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Quote:
Originally Posted by lifesciman1
You should really read the slides, I remember doing these Qs last year. Its a joke once you read the slides.
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Illusion of the expert. Just because you find it a joke doesn't mean everyone else does.
__________________
"You can't treat every situation as a life-and-death matter. Cause' you'll die a lot times"
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10-22-2012 at 10:08 AM
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#8
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Quote:
Originally Posted by Marooner
Illusion of the expert. Just because you find it a joke doesn't mean everyone else does.
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Yea I guess that was a far fetched assumption. I personally thought the slides were crystal clear. |
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10-22-2012 at 10:11 PM
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#9
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Quote:
Originally Posted by jasmineb
Hey I'm having some trouble with this question does anybody know?
When one firm sells its pollution permit to another firm, which of the following will MOST likely occur?
A) Only one firm benefits.
B) The total amount of pollution remains the same.
C) Social welfare is unaffected.
D) Over time, pollution will be eliminated.
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The answer is B. Selling a pollution permit just means selling the amount of pollution YOU can legally create to another firm. The other firm wouldn't buy it if they had no intention of utilizing the permit. |
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