Refer to the data provided in Table 16.1 below to answer the following question(s). Table 16.1 shows the situation facing two firms, both of which are polluting. Assume that each firm emits 5 units of pollution.

Table 16.1

Firm A	Firm A	Firm A	Firm B	Firm B	Firm B
Reduction of Pollution by Firm A	MCof reducing pollution for Firm A	TCof reducing pollution for Firm A	Reduction of Pollution by Firm B	MCof reducing pollution for Firm B	TCof reducing pollution for Firm B
1	$4	$4	1	$8	$8
2	6	10	2	12	20
3	9	19	3	16	36
4	13	32	4	20	56
5	18	50	5	24	80

Refer to Table 16.1. Suppose the government wants to reduce the total amount of pollution from the current level of 10 to 4. To do this, the government caps each firm's emissions at 2 units and issues 2 permits to each firm. Which of the following are true? (Select all that apply.)

a. Firm B would be willing to pay $16 to buy a pollution permit

b. If no trading is allowed, the total cost of reducing pollution is $55

c. Firm B would be willing to sell a pollution permit for $9

d. If trading is allowed, the total cost of reducing pollution is $52

e. Firm A would be willing to pay $10 to buy a pollution permit

f. If no trading is allowed, the total cost of reducing pollution is $130

g. Firm A would be willing to sell a pollution permit for $9

h. If trading is allowed, the total cost of reducing pollution is $55

Refer to the data provided in Table 16.1 below to answer the following question (5). Table 16.1 shows the situation facing two firms, both of which are polluting. Assume that each firm emits 5 units of pollution. Table 16.1 MC of TC of TC of reducing reducing reducing pollution for pollution for Firm A Firm B Refer to Table 16.1. Suppose the government wants to reduce the total amount of pollution from the current level of 10 to 4. To do this, the government caps each firm's emissions at 2 units and issues 2 permits to each firm. Which of the following are true? (Select all that apply.) I a. Firm B would be willing to pay $16 to buy a pollution permit C] b. If no trading is allowed, the total cost of reducing pollution is $55 I c. Firm B would be willing to sell a pollution permit for $9 I d. If trading is allowed, the total cost of reducing pollution is $52 C e. Firm A would be willing to pay $10 to buy a pollution permit E f. If no trading is allowed, the total cost of reducing pollution is $130 E g. Firm A would be willing to sell a pollution permit for $9 I h. If trading is allowed, the total cost of reducing pollution is $55