The Economic Rationale Behind Effluent Fees Is

question 19

Multiple Choice

The economic rationale behind effluent fees is

• A) to eliminate all pollution.
• B) to create external diseconomies.
• C) to expand the role of regulatory agencies.
• D) unsound because the private market system is not given the freedom to eliminate the pollution problem.
• E) to bring the private cost of waste disposal closer to the social cost.

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Definitions:

Investment Account

A financial account held at a bank or brokerage that is used to hold securities, stocks, bonds, and other investments.

Unamortized Acquisition Differential

The portion of the difference between the purchase price and the book value of an acquired entity that has not yet been amortized.

Equity Method

An accounting technique used by a company to record its investment in another company based on the profit or loss and other comprehensive income of the investee.

Voting Shares

Shares of stock that grant the shareholder the right to vote on matters of corporate policy and the election of board members.