Which of the Following Criteria Should Be Used to Evaluate

question 254

Multiple Choice

Which of the following criteria should be used to evaluate if government intervention in a market for the purpose of environmental protection is justified?

• A)Does the intervention program reduce pollution to zero using the least costly method?
• B)Is the intervention program economically efficient?
• C)Does the intervention program make the amount of economic surplus as large as possible?
• D)Is the damage to the environment from government intervention as small as possible?

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Definitions:

Pollution Rights

Tradable permits or licenses that allow the holder to emit a certain amount of pollution; used as an economic tool for controlling and reducing environmental degradation.

Pollution Permits

Allowances issued by governments that give companies the right to emit a certain amount of pollutants, intended to reduce overall pollution by market mechanisms.

Supply

The total amount of a product or service that is available for consumers to purchase at various price levels.

Pollution Rights

Permits or allowances that grant entities the right to emit a certain amount of pollutants into the environment.