A Tradable Emissions Permit Program Is Efficient Because the Cap

question 202

Multiple Choice

A tradable emissions permit program is efficient because the cap protects the environment while:

• A)​generating substantial revenues for the government.
• B)​keeping compliance and administration costs relatively low.
• C)​while requiring the same response by each polluter.
• D)​none of above

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Definitions:

Economies of Scale

The savings that organizations achieve through their size of operation, where the expense per produced unit consistently decreases with an upscaling in operation.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm's size or output increases beyond a certain point.

U-shaped

A description often used to illustrate how certain economic variables, such as average cost, behave, initially decreasing with increased activity and then increasing.

TVC

Total Variable Cost, which refers to the sum of all costs that vary with the level of output or production, such as raw materials and direct labor costs.