Consider a carbon-tax and a cap-and-trade strategy for reducing carbon dioxide and other so-called greenhouse gases. Which of the following statements is true?
a.) A carbon tax and a cap-and-trade system have the same outcomes.
b.) Under a cap-and-trade system the firms that polllute the most must clean up the most.
c.) A cap-and-trade system improves efficiency by creating scarcity.
d.) A carbon tax would reduce consumption and lessen the externalities but is easy to evade.
Ans: c.) A cap-and-trade system improves efficiency by creating scarcity.
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Explain if this is an example of an incentive, and what effect this policy is likely to have on the amount of charitable contributions in the United States.
Complete crowding out implies that a government deficit financed by selling bonds to the nonblank public will
A) have no effect on aggregate demand. B) reduce aggregate demand. C) increase aggregate demand. D) reduce aggregate demand in the short run but cause demand to increase in the long run.
The ________ economists would have the government do absolutely nothing during a period of relatively high unemployment.
Fill in the blank(s) with the appropriate word(s).
Give an example of how the profits change from the short run to the long run for a firm in a perfectly competitive market.
What will be an ideal response?