When the Number of Tradeable Allowances Is Set Equal to the Efficient

question 11

Multiple Choice

When the number of tradeable allowances is set equal to the efficient market quantity:

• A) it is equivalent to a tax set equal to the level of the external cost.
• B) the outcome will be more efficient than a tax on pollution.
• C) it is equivalent to a government regulation set equal to the efficient market quantity.
• D) the price of the allowances will equal the social cost of pollution.

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Definitions:

Diastereomers

Stereoisomers that are not mirror images of each other and have different physical properties, including different melting points and boiling points.

Trichloroheptane

An organic compound that consists of a heptane backbone with three chlorine atoms attached, which can exist in several isomeric forms.

Orientation

Describes the spatial arrangement of atoms or groups in a molecule relative to one another.

Asymmetric Carbons

Carbon atoms bonded to four different groups, leading to molecules that can exist in two non-superimposable mirror image forms.