The Government Prefers a Market-Based Approach to Reduce Firms' Emissions

question 176

Multiple Choice

The government prefers a market-based approach to reduce firms' emissions of a toxic gas but wants to make certain that no more than 1,000 cubic yards of the gas are ever emitted in a single day.The most efficient policy under these circumstances is likely to be a system of

• A)per-unit taxes on emissions of the gas.
• B)per-unit taxes on the goods produced by firms that emit the gas.
• C)subsidies to firms that agree not to emit the gas.
• D)sales of permits to emit specified quantities of the gas on specified days.

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Definitions:

Philanthropic

Relating to the desire to promote the welfare of others, usually expressed especially by the generous donation of money to good causes.

Event Outcome Forecasts

Predictions about the results or consequences of events in the future.

Time Series Forecasts

Predictive analyses that utilize historical data to project future trends, patterns, or values over time.

Event Scope Forecasts

Projected analyses that predict the extent or magnitude of events, often used in planning and risk assessment.