A Potential Disadvantage of Emissions Taxes Versus Direct Pollution Controls

question 83

Multiple Choice

A potential disadvantage of emissions taxes versus direct pollution controls is that

• A)emissions taxes do not specify how the pollution is to be controlled,which leads to economic inefficiency in the implementation of the pollution restraint.
• B)pollution becomes a part of each firm's profit-maximizing calculations,encouraging firms to find more efficient ways to pollute.
• C)the authorities might have a better idea of the socially optimal level of pollution than of the optimal tax rate that would achieve it.
• D)emissions taxes introduce distortions to the price system,whereas direct controls do not.
• E)emissions taxes are more expensive to administer.

---

Definitions:

Cognitive Dissonance

A psychological discomfort experienced when holding two or more conflicting beliefs, ideas, or values at the same time.

Foot-In-The-Door Phenomenon

A psychological tactic involving getting someone to agree to a small request to increase the chances of them agreeing to a larger request later.

Cognitive Dissonance

The psychological discomfort experienced when holding two or more conflicting thoughts, beliefs, values, or attitudes.

Role-Playing

A teaching or training technique that involves acting out situations or assuming the roles of characters to simulate real-life scenarios.