If an Objective of Public Policy Is to Allocate Pollution

question 412

Multiple Choice

If an objective of public policy is to allocate pollution to those factories that face the highest cost of reducing it, then that objective could be achieved by

• A)a corrective tax, but not by regulation.
• B)regulation, but not by a corrective tax.
• C)either regulation or a corrective tax.
• D)neither regulation nor a corrective tax.

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Definitions:

Fair Value

An estimate of the price at which an asset or liability could be bought or sold in an orderly transaction between market participants at the measurement date.

Par Value

The face value of a bond or the stock value stated in the corporate charter, not necessarily related to its market value.

Fair Value

The estimated price at which an asset or liability could be traded in a fair transaction between willing parties.

Stock Issuance Costs

Expenses incurred by a company to register and issue shares of stock, such as legal, accounting, and printing costs.