The Difference Between a Corrective Tax and a Tradable Pollution

question 309

Multiple Choice

The difference between a corrective tax and a tradable pollution permit is that

• A)a corrective tax sets the price of pollution and a permit sets the quantity of pollution.
• B)a corrective tax creates a more efficient outcome than a permit.
• C)a corrective tax sets the quantity of pollution and a permit sets the price of pollution.
• D)a permit creates a more efficient outcome than a corrective tax.

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Definitions:

Working Memory

A component of short-term memory that involves the temporary storage and manipulation of information.

Fluid Intelligence

The capability to reason and think flexibly, solving new problems without relying on acquired knowledge.

Crystallized Intelligence

The ability to use learned knowledge and experience, typically stable or increasing with age.

Fluid Intelligence

The ability to think abstractly, reason, identify patterns, and solve problems quickly, which tends to decrease with aging.