If Transactions Costs Are Very High and Auctions for Pollution

question 14

Multiple Choice

If transactions costs are very high and auctions for pollution permits are not possible, which of the following is the most effective way to deal with pollution?

• A)Allow the parties to negotiate
• B)Tax pollution
• C)Require all polluters to limit their pollution to a certain level with regulation
• D)Give subsidies to reduce pollution

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Definitions:

Biotechnology

The use of living organisms, cells, and molecular techniques to develop products and technologies that improve lives and the health of the planet.

Biodiversity

The variety of life in the world or in a particular habitat or ecosystem, crucial for ecological balance and resilience.

Environmental Issues

Concerns related to the degradation or pollution of the natural environment, including air, water, and land, due to human activities.

Social Problem

A condition or a pattern of behavior that is believed to warrant public concern and collective action.