When the Government Issues Marketable Permits

question 55

Multiple Choice

When the government issues marketable permits

• A)each firm buys or sells permits until its marginal benefit from polluting equals the market price of a permit.
• B)firms that have a low marginal cost of reducing pollution sell their permits, and firms that have a high marginal cost of reducing pollution buy permits.
• C)the incentive to pollute is greater than when the government sets emission charges.
• D)the price at which firms buy and sell permits is set by the government.
• E)firms that have a high marginal cost of reducing pollution sell their permits, and firms that have a low marginal cost of reducing pollution buy permits.

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Definitions:

Laryngopharynx

The lower part of the pharynx just below the oropharynx, facilitating the passage of food to the esophagus and air to the larynx.

Nasopharynx

The upper part of the throat located behind the nose, connecting the nasal cavity to the mouth and the esophagus.

Oropharynx

The part of the throat that is located at the back of the mouth, serving as a pathway for food and air.

Larynx

The voice box located at the upper part of the trachea, responsible for voice production, breathing, and protecting the trachea against food aspiration.