Which of the Following Statements Is True of Both Pollution

question 404

Multiple Choice

Which of the following statements is true of both pollution permits and corrective taxes?

• A)Both policies internalize the externality of pollution.
• B)Both policies require firms to pay for their pollution.
• C)Both policies lead to the establishment of an equilibrium price of pollution.
• D)All of the above are correct.

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Definitions:

Absolutism

A political doctrine and practice where a single ruler or government holds absolute power, without legal, electoral, or social checks and balances.

Ethical Relativism

The theory that holds that morality is relative to the norms of one's culture, meaning that what is considered morally right or wrong varies from society to society.

Consequentialism

An ethical theory that judges whether something is right or wrong based on the consequences of the action, rather than the action itself.

Utilitarianism

An ethical theory that suggests the best action is the one that maximizes utility, often defined as maximizing happiness and reducing suffering.