A Cap-And-Trade Policy Is an Efficient Method of Reducing Pollution

question 17

Multiple Choice

A cap-and-trade policy is an efficient method of reducing pollution because

• A) all firms will be forced to reduce pollution.
• B) only high-cost firms will be forced to reduce pollution.
• C) only low-cost firms will be forced to reduce pollution.
• D) those who can reduce pollution relatively more cheaply will have an incentive to buy permits.
• E) those who can reduce pollution relatively more cheaply will have an incentive to sell permits.

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Definitions:

Intrinsic Rewards

Internal or psychological rewards that are derived from the activity itself rather than from external factors.

Extrinsic Reinforcers

Reinforcers that are not inherently related to the activity being reinforced.

Inherently Related

Describes things that are naturally or fundamentally connected or linked to each other.

Latent Learning

A form of learning that is not immediately expressed in an overt response; it occurs without obvious reinforcement.