Why do most economists favor emissions taxes and transferable pollution rights over compliance standards as pollution deterrents?
Compliance standards do not consider which firms can reduce pollutants at the lowest cost. Pollution taxes, on the other hand, encourage firms to develop and utilize abatement technologies in order to avoid paying taxes. Firms able to reduce pollution levels at relatively low opportunity costs can sell transferable pollution rights to firms unable to reduce pollution levels except at relatively high opportunity costs.
You might also like to view...
For a demand curve to be upward sloping, the good would have to be an inferior good, and
A) the income effect would have to be larger than the substitution effect. B) the income effect would have to be smaller than the substitution effect. C) the income effect would have to be equal to the substitution effect. D) the income effect and the substitution effect would have to be nonexistent.
The data presented in the text shows that in the period from 1947-2013, real GDP in the United States has
A) decreased in every year since 1947. B) generally remained the same. C) decreased only in recent years. D) increased substantially.
Which one of the following statements is NOT true?
A. A firm that chooses to cheat on a price-fixing scheme should consider the short-term gain in profits from cheating versus the long-term loss in profits from being punished. B. The duopoly-pricing strategy leads to negative economic profits. C. Cartels may break down because of the incentive to cheat. D. Price leadership arrangements are an implicit price-fixing scheme.
If people in the United States buy more of a foreign good when its price falls, then
A) the demand curve for U.S. dollars will slope up. B) the supply curve for U.S. dollars will slope up. C) the exchange rate will increase when there is inflation. D) fixed exchange rates will make foreign exchange markets more efficient.