Suppose an industry emits a negative externality such a pollution and the possible methods to internalize the externality are command-and-control policies, pigovian taxes, and tradable pollution permits. If economists were to rank these methods for internalizing a negative externality based on efficiency ease of implementation and the incentive for the industry to further reduce pollution in the future, they would probably rank them in the following order (from most favored to least favored) ?

Related Mcqs:

A positive externality (that has not been internalized) caused the ?

A. equilibrium quantity to exceed the optimal quantity B. equilibrium quantity to equal the optimal quantity C. optimal quantity to exceed the equilibrium quantity D. equilibrium quantity to be either above or below the optimal quantity...

The government engages in a technology policy ?

A. by allocating tradable technology permits to high technology industry. B. to internalize the positive externality associated with technology-enhancing industries. C. to help stimulate private solution to the technology externality D. to internalize the negative externality associated with industrial pollution...

The most efficient pollution control system would ensure that ?

A. the regulators decide how much each polluter should reduce its pollution. B. no pollution of the environment is tolerated C. each polluter reduces its pollution an equal amount D. the polluters with the lowest cost of reducing pollution reduce their pollution the greatest amount...

When an individual buys a car in a congested urban area, it generates ?

A. a positive externality B. a technology spillover C. an efficient market outcome. D. a negative externality...

According to the Coase theorem, private parties can solve the problem of externalities if ?

A. there are no transaction costs. B. each affected party has equal power in the negotiations. C. the party affected by the externality has the initial property right to be left alone. D. There are a large number of affected parties. E. the government requires them to negotiate with each other...