A Market for Pollution Rights Is an Efficient Approach to Pollution

question 19

Multiple Choice

A market for pollution rights is an efficient approach to pollution control because

• A)It is cheap to implement
• B)It leads to the complete elimination of pollution
• C)It causes the pollution to be eliminated at the lowest cost
• D)It is easy to enforce
• E)None of the above

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Definitions:

Tax Level

The rate at which income, corporate profits, or other assets are taxed by the government.

Zero-coupon Bonds

Fixed-income securities issued at a discount and repaid at face value but do not offer interest payments through their life.

Tax-sheltered Retirement Plans

Retirement savings plans that provide tax advantages to the saver, often by allowing pre-tax contributions or tax-free growth.

Tax Bill

The total amount of tax owed by an individual or corporation to a taxing authority, after all deductions, credits, and exemptions.