Why Are Direct Controls for Reducing Pollution Likely to Be

question 78

Multiple Choice

Why are direct controls for reducing pollution likely to be inefficient?

• A)The cost of reducing pollution is greater than the benefit.
• B)Direct controls are impossible to monitor.
• C)Firms with different pollution abatement costs are facing identical regulations.
• D)Firms are not likely to comply with this method of government intervention.
• E)Firms' output will rise above the socially optimal amount.

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Definitions:

Free Cash Flow

The amount of cash a company produces through its operations, after subtracting the cost of expenditures on assets.

Net Cash

The difference between a company’s total cash inflows and cash outflows in a given period.

Investing Activities

Part of a company's cash flow statement that shows the outflow and inflow of cash from investments in property, plant, equipment, and financial securities.

Net Cash

The residual cash following the assessment of cash coming in and going out.