Which of the following is true regarding tradable pollution permits and Pigouvian taxes ?

Related Mcqs:

An externality is ?

A. the benefit that accrues to the buyer in a market B. the cost that accrues to the seller in a market C. none of these answers D. the compensation paid to a firm’s external consultants. E. The uncompensated impact of one person’s actions on the well-being of a bystander...

A positive externality generates ?

A. a social cost curve that is above the supply curve (private cost curve) for a good B. none of these answers C. a social value curve that is above the demand curve (private value curve) for good D. a social value curve that is below the demand curve (private value curve) for a good...

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...

Which of the following is not considered a transaction cost incurred by parties in the process of contracting to eliminate a pollution externality ?

A. costs incurred due to lawyers’ fees B. costs incurred to reduce the pollution C. costs incurred to enforce the agreement D. costs incurred due to a large number of parties affected by the externality E. All of these answers are considered transaction costs...