In Order for a Property Rights Approach to Produce an Efficient

question 8

Multiple Choice

In order for a property rights approach to produce an efficient level of environmental pollution the following conditions must be met:

• A) property rights must be well defined, enforceable and transferable.
• B) there must be a system for efficient negotiation about property rights to be negotiated.
• C) there must be a set of markets for environmental assets.
• D) all of the above.

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Definitions:

Equilibrium Quantity

The quantity of goods or services supplied is exactly equal to the quantity demanded at the market price.

Market Demand

The total quantity of a good or service that all consumers in a market are willing and able to purchase at a given price.

Tax Revenue

Income that is gained by governments through taxation, used to fund public services and government obligations.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded, typically downward sloping to the right.