The Simplest Way for Government to Intervene to Remedy a Country's

question 13

Multiple Choice

The simplest way for government to intervene to remedy a country's pollution problem is through the use of

• A) effluent fees.
• B) direct regulation.
• C) pollution taxes.
• D) tax credits for pollution control equipment.
• E) certificates or licenses to pollute.

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Definitions:

Externalities

Economic side effects or consequences of commercial activities that affect other parties without being reflected in the cost of the goods or services involved.

Market Failure

A less than efficient allocation of resources.

Public Goods

Public goods refer to commodities or services that are made available to all members of a society, typically funded by the government, and characterized by non-excludability and non-rivalry in consumption.

Externalities

Consequences of an economic activity experienced by unrelated third parties; can be positive or negative.