Consider the Production of Pesticide That Pollutes a Lake Used

question 90

Multiple Choice

Consider the production of pesticide that pollutes a lake used by a trout farmer.A marketable permit

• A)creates an efficient outcome when the price of the permit is set equal to the external cost.
• B)cannot result in the same outcome as when property rights are assigned to the pesticide producer.
• C)cannot result in the same outcome as when property rights are assigned to the trout farm.
• D)cannot result in the same outcome as when the government imposes a Pigovian tax.
• E)creates an efficient outcome when the price of the permits is set equal to the external benefit.

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Definitions:

Tactics

Specific actions or strategies designed to achieve a short-term goal or to deal with a particular situation.

Agent

An individual or entity authorized to act on behalf of another (known as the principal) in dealing with third parties.

Symbolic Rewards

Non-financial incentives such as recognition, awards, or titles given to acknowledge an individual’s or team's achievements.

Mutual Loyalty

A reciprocal commitment or allegiance between individuals or within a group, fostering trust and support.