Why Are Taxes on Pollutants and Tradeable Allowances Considered to Have

question 65

Multiple Choice

Why are taxes on pollutants and tradeable allowances considered to have similar effects in solving externality problems?

• A) The companies who are taxed are also simultaneously subject to the allowances of pollutants.
• B) They both reduce pollution of exactly the same types of pollutants.
• C) They both bring markets closer to the efficient quantity.
• D) Companies can trade the taxes on pollutants just as they trade the allowances on pollutant amounts.

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Definitions:

Quarterly Dividend

A payment made by a corporation to its shareholders, typically every three months, as a distribution of profits.

Shares

Units of ownership interest in a corporation or financial asset, representing a portion of a company's equity capital.

Quarterly Dividends

Payments made by a corporation to its shareholders, usually on a quarterly basis, from its profits or reserves.

Capital Gains

The profit from the sale of assets or investments when the selling price exceeds the original purchase price.