When tradable allowances are used to correct negative externalities in a market, the outcome:
A. limits the quantity bought and sold to the efficient level.
B. maximizes surplus.
C. is efficient.
D. All of these statements are true.
D. All of these statements are true.
You might also like to view...
Refer to the above figure. Suppose the original long-run equilibrium was at point B. What could have caused the move to the current equilibrium?
A) Aggregate demand must have decreased. B) Input prices must have increased, causing long-run aggregate supply to increase. C) Decreases in the price level caused short-run aggregate supply to fall. D) A temporary reduction in production due to bad weather.
Firms may be tempted to cheat on cartel agreements by: a. raising both price and output
b. lowering both price and output. c. raising price and reducing output. d. lowering price and increasing output.
In order to produce 100 oatmeal cookies, Goodie Cookie Co incurs an average total cost of $0.25 per cookie. The company's marginal cost is constant at $0.10 for all oatmeal cookies produced. The total cost to produce 50 oatmeal cookies is _____
a. $25 b. $20 c. $50 d. $60
Which of the following statements is true?
A. Emissions-trading is trading that allows firms to buy and sell the right to pollute. B. The Coase Theorem is the proposition that private markets can rarely ever achieve social efficiency. C. The free-rider problem refers to those who ride on public transit systems without paying. D. Government failure has never occurred in the United States.