Tradable Pollution Permits Achieve a Given Emission Target Efficiently Because

question 58

Multiple Choice

Tradable pollution permits achieve a given emission target efficiently because:

• A)firms can bargain over the price of the permits.
• B)permits will be purchased by the firms that incur the least abatement cost.
• C)permits will be purchased by the firms that incur high abatement costs.
• D)the polluting firms will eventually go out of business.

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Definitions:

Accounting Theory

A framework of principles that underlie the practice and methodology of accounting in financial reporting.

Normative Theories

Theories that prescribe how things should be or how decisions should be made, often applied in ethics, economics, and law.

Positive Accounting Theory

An accounting theory that seeks to explain and predict accounting practices, focusing on the relationships between various parties involved in accounting.

Political Contracts

Agreements made in the context of political relations, often involving government entities, which can encompass a wide range of subject matter from trade to defense.