The Command and Control Method to Solving an External Cost

question 176

Multiple Choice

The command and control method to solving an external cost problem usually involves:

• A) the imposition of taxes on the consumption of the item that is causing the external cost.
• B) the institution of a subsidy on the consumption of the item that is causing the external cost.
• C) the issuance of a regulation on the production, operation, or use of the item that is causing an external cost.
• D) a price ceiling on the item that is causing an external cost.

---

Definitions:

Qualitative Forecasts

Forecasting methods that use expert judgement rather than numerical data to predict future events or trends.

Delphi Technique

A method used for collecting and distilling the collective expertise of a group of experts through rounds of questionnaires, often used in forecasting and decision making.

Regression Analysis

A statistical method used to examine the relationship between one dependent variable and one or more independent variables.

Trend Analysis

A forecasting method that extrapolates from historical trends.