The Advantage of Selling Pollution Permits Rather Than Using a Fixed-Percentage

question 94

Multiple Choice

The advantage of selling pollution permits rather than using a fixed-percentage reduction for all firms is

• A) that government raises additional revenue.
• B) that reductions in pollution are accomplished by those firms that can do so at least cost.
• C) that enforcement costs are eliminated.
• D) that pollution is driven to zero.
• E) an increase in the benefit to pollution reduction.

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Definitions:

Signaling Theory

A concept that suggests that individuals send signals about their qualities or intentions through their actions or investments, which others then interpret to make decisions.

Brand Names

The distinctive titles given to products or services by companies to identify and differentiate them from competitors' offerings.

Unsavory Taste

A negative or unpleasant flavor perceived during food consumption.

Blind Taste Test

A blind taste test is a method of evaluating food or drink products where the participants are unaware of the brands being tested to eliminate bias.