If an Objective of Public Policy Is to Allocate Pollution

question 412

Multiple Choice

If an objective of public policy is to allocate pollution to those factories that face the highest cost of reducing it, then that objective could be achieved by

• A)a corrective tax, but not by regulation.
• B)regulation, but not by a corrective tax.
• C)either regulation or a corrective tax.
• D)neither regulation nor a corrective tax.

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Definitions:

Efficient Outcome

A situation in economics in which resources are allocated in the most effective manner, maximizing the potential benefit to an economy or market without wasting resources.

Utility

In economics, a measure of satisfaction or happiness that consumers get from consuming goods or services.

Apartment Owner

An individual or entity that holds the title to a residential unit in a building.

Prisoner's Dilemma

A paradox in decision-analysis in which two individuals acting in their own self-interest do not produce the optimal outcome.