Which Statement Indicates a Reason Some Policymakers Are Hesitant to Use

question 324

Multiple Choice

Which statement indicates a reason some policymakers are hesitant to use permit trading to reduce pollution?

• A) Marketable permits have had little success in the past.
• B) It appears contradictory to use a market-based approach to solve market failure.
• C) Economists generally cannot agree that the permits are efficient.
• D) Virtually all policies aim at zero pollution.

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Definitions:

Fair Value

An estimate of the market value of an asset or liability based on current prices in active markets for similar assets or liabilities.

Lessee

A Lessee is a person or entity who leases an asset from another, the lessor, under a lease agreement.

Lessor

A lessor is the party that leases or rents a property or asset to another party, known as the lessee.

Capital Lease

A lease arrangement that is recorded as an asset on the lessee's balance sheet, essentially treated as a purchase of the leased asset for accounting purposes.