A major problem with using a tradable emission allowances system to control pollution is
A) that it grants firms a license to pollute.
B) the difficulty in determining the emissions target.
C) that it does not eliminate pollution completely.
D) it discourages firms from implementing cost-effective pollution control technology.
B
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Which of the following is a "guns or butter" decision?
(A) A school has to decide whether to build a new gym or renovate the auditorium. (B) A man must decide whether to install an alarm system in his house or buy new furniture for the living room. (C) A woman has to decide whether to replace her old car with a new sports car or a family sedan. (D) A country must decide whether to use its steel to build new fighter jets or new sports cars.
Each of the following, except one, is a limitation on collusive behavior. Which is the exception?
a. the market demand curve b. a tit-for-tat strategy c. the threat of prosecution d. incentives for firms to lower prices e. incentives for firms to raise output