What is the rationale behind a marketable emission allowance scheme?
A) to discipline polluting firms by specifying the maximum amount of emissions allowed and giving them permits to pollute up to their allowance
B) to provide firms with the incentive to consider less costly alternatives to pollution reduction by making firms pay for the right to pollute beyond their specified allowance
C) to raise revenue for the government through the sale of emission permits and at the same time set an emissions target
D) to create a market for externalities: the scheme brings together buyers and sellers of marketable permits
B
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Which of the following is true about optimal search?
a. Optimal search occurs where the marginal benefit of search just equals the marginal cost of search, where the two curves intersect. b. Optimal search occurs when the total benefit of search exceeds the total cost of search. c. Optimal search occurs where the marginal benefit of search is equal to zero. d. Optimal search occurs when the marginal cost of search exceeds the marginal benefit of search.