Briefly explain the command-and-control approach in dealing with an externality such as pollution. Give an example of the U.S. government using the command-and-control approach to deal with the pollution problem
What will be an ideal response?
Command-and-control is an approach that involves the government imposing quantitative limits on the amount of pollution firms are allowed to emit or requiring firms to install specific pollution control devices. One example listed in the text ocurred in 1983, when the federal government required auto manufacturers to install catalytic converters to reduce auto emissions on all new automobiles.
You might also like to view...
If the government institutes a specific tax for a good that has a perfectly elastic demand curve
A) the producer passes the entire tax on to the consumer. B) the producer must absorb the entire tax. C) the producer can generally only pass part of the tax onto the consumer. D) the equilibrium price drops.
The average propensity to save (APS) is the proportion of disposable income that is saved
a. True b. False Indicate whether the statement is true or false