How are tradable pollution permits used?
a) They are permits bought by firms where prices are set by governments.
b) They will be bought by firms that can reduce pollution only at high costs.
c) They will be bought by firms that can reduce pollution at low costs.
d) They will be used in reducing pollution when corrective taxes cannot be used.
Ans: b) They will be bought by firms that can reduce pollution only at high costs.
You might also like to view...
In competitive markets, a surplus or shortage will
A. cause changes in the quantities demanded and supplied that tend to intensify the surplus or shortage. B. cause changes in the quantities demanded and supplied that tend to eliminate the surplus or shortage. C. cause shifts in the demand and supply curves that tend to eliminate the surplus or shortage. D. never exist because the markets are always at equilibrium.
When carmakers began to cut costs of producing cars by designing the chassis, engines, and transmissions so that different models could be produced on the same assembly line, production costs fell $240 per car. This change caused car makers' short-run average cost curves to:
A. remain unchanged, though there was a movement along the short-run average cost curve. B. shift down. C. remain unchanged; only the long-run average cost curve was affected. D. shift up.