A Tradable Permit System

question 10

Multiple Choice

A tradable permit system:

• A) requires that each firm reduce its pollution by the same amount.
• B) is difficult to implement because regulators do not know the marginal abatement costs of every company.
• C) achieves a given amount of pollution reduction at the least cost because firms with lowest marginal abatement costs do most of the reduction.
• D) increases pollution because the government gives firms permits that grant them the right to pollute.

---

Definitions:

Cataracts

A medical condition where the lens of the eye becomes progressively opaque, leading to blurred vision.

Sunlight

The natural light emitted by the sun, which is essential for the survival of many organisms and influences Earth’s climate.

Diabetes

A disease marked by high levels of blood glucose that occurs when the body is unable to regulate the amount of glucose in the bloodstream because there is not enough insulin produced (type 1 diabetes) or the body shows insulin resistance and becomes less sensitive to it, failing to respond to it (type 2 diabetes); symptoms include fatigue, great thirst, blurred vision, frequent infections, and slow healing.

Carbon Monoxide

A colorless, odorless, and toxic gas produced by incomplete combustion, capable of causing serious health issues or death.