In a Situation Where There Is No Incentive to Cut

question 138

Multiple Choice

In a situation where there is no incentive to cut pollution because it will make domestic firms less competitive, world welfare will improve if:

• A) nations impose tariffs on polluters.
• B) there is an international agreement so that every nation regulates global pollutants and no firms have competitive advantages because of lax pollution laws.
• C) there is a ban on production until we can scientifically solve our pollution problems.
• D) we allow the market to work in this case.

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Definitions:

Exculpatory Agreement

A clause that says one of the parties to a contract, generally the one who wrote the contract, is not liable for any economic loss or physical injury, even if that party caused the loss or injury.

Exculpatory Clause

A clause in a contract that releases a party from liability for his or her wrongful acts. These clauses are not favored by law.

Geographical Area

Refers to a specific physical region or location defined by natural or artificial borders.

Minor

A person under the legal age of adulthood, which varies by jurisdiction, typically below 18 years old.