Acounterpurchase occurs when a firm agrees to buy a certain amount of materials back from a country to which a sale is made. direct exchange of goods and services takes place between two parties without a cash transaction. a firm builds a plant in a country and agrees to take a certain percentage of the plant's output as partial payment for the contract. exchange of goods and services occur through a bank in the exporter's country.

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Any point on a country's production possibilities frontier represents a combination of two goods that an economy:

Wo firms, a and b, each currently dump 50 tons of chemicals into the local river. the government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. it costs firm a $100 for each ton of pollution that it eliminates before it reaches the river, and it costs firm b $50 for each ton of pollution that it eliminates before it reaches the river. the government gives each firm 20 pollution permits. government officials are not sure whether to allow the firms to buy or sell the pollution permits to each other. what is the total cost of reducing pollution if firms are not allowed to buy and sell pollution permits from each other? what is the total cost of reducing pollution if the firms are allowed to buy and sell permits from each other? a. $3,000; $1,500 b. $4,500; $3,500 c. $4,500; $4,000 d. $4,500; $2,500