Which of the following statements is correct about a market in which pollution is emitted?
a. Both corrective taxes and pollution permits move the market toward the social optimum.
b. Corrective taxes move the market toward the social optimum, but pollution permits do not move the market toward the social optimum.
c. Pollution permits move the market toward the social optimum, but corrective taxes do not move the market toward the social optimum.
d. Neither corrective taxes nor pollution permits move the market toward the social optimum.
a
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If the minimum wage rate is set above the equilibrium wage rate, then
A) unemployment definitely increases. B) unemployment definitely decreases. C) unemployment either decreases or does not change. D) unemployment definitely does not change. E) None of the above answers is correct because the minimum wage decreases search but its effect on unemployment is ambiguous.
International capital flows in an open economy have the effect of
a. reducing the power of monetary policy. b. increasing the power of monetary policy. c. increasing the power of monetary policy in an expansion and reducing it in a contraction. d. reducing the power of monetary policy in an expansion and increasing it in a contraction.
The Federal Reserve
a. designs tax policy. b. enforces the nation's antitrust laws. c. sets the nation's monetary policy. d. analyzes data on workers.
In a closed economy, public saving plus private saving is equal to
A) investment. B) taxes minus transfers. C) the budget surplus. D) the budget deficit.