Raising Cattle Causes Negative Externalities in the Form of Gas

question 53

Multiple Choice

Raising cattle causes negative externalities in the form of gas and manure produced by cows, which contains methane, a greenhouse gas that causes climate change. Suppose the government is developing a policy to counteract this externality. Which of the following is a policy that directly targets the externality?

• A)A tax on methane emissions
• B)A tax on cow purchases
• C)Tradeable permits where each allowance is for one cow
• D)All of these are policies that target the externality.

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Definitions:

Wild Salmon

A type of salmon that is born and spends its life in natural bodies of water, as opposed to being raised in captivity or fish farms.

Threat of Extinction

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Goldfish Populations

The total number of goldfish within a specific habitat or ecosystem, important for studying biodiversity and ecosystem health.

Excludable

Describes a good or service for which it is possible to prevent non-paying consumers from access, through mechanisms like price or physical restrictions.