Briefly discuss the shortcomings of environmental command-and-control regulations
Although environmental command-and-control regulations have helped to protect the environment, they have four shortcomings: they provide no incentive to go beyond the limits they set; they offer limited flexibility in where and how pollution will be reduced; they often require specialized knowledge regarding the cost structures of each firm; and they are often viewed as unfair by the participating firms.
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You overhear the following in the hallway, "Everyone eventually dies, so how can a life insurance company make a profit? Isn't it a losing battle? You will always have to pay the death benefit to your clients!" You know that life insurance compa
can be profitable. This is because A) the premiums you pay on a life insurance policy are always more than any death benefit, so the insurance company always comes out ahead. B) older people with a greater probability of dying during the term of a policy are denied any death benefits. C) the insurance company collects more than enough in premiums today to cover expected benefits payable today. D) life insurance companies are notorious for cheating clients with "fine print" policy clauses.
A tit-for-tat strategy is one in which oligopolies
A) cooperate as long as other members cooperate, but if anyone cheats, they cut the price until the cheater reverts to cooperation. B) cooperate almost all of the time, but occasionally do not cooperate in order to fool the antitrust authorities. C) keep cutting prices to punish rivals until the competitive price is reached. D) try to avoid the problems of the prisoners' dilemma, but actually make themselves worse off.