Asked by
Dylan Conaway
on Dec 17, 2024Verified
In some cases, tradable pollution permits may be better than a corrective tax because
A) pollution permits allow for a market solution while a corrective tax does not.
B) corrective taxes distort incentives.
C) pollution permits generate more revenue for the government than a corrective tax.
D) it is hard to estimate the market demand curve and thus charge the right corrective tax.
Tradable Pollution Permits
A strategy utilizing the market to limit pollution, offering economic rewards for lowering the levels of emitted pollutants.
Corrective Tax
A tax designed to encourage or discourage certain behaviors by effectively increasing the costs associated with these behaviors, often used for environmental or public health reasons.
Market Demand Curve
A graphical representation showing the quantity of a good consumers are willing and able to buy at different price levels.
- Acquire knowledge on the workings and outcomes of tradable pollution permits within the context of pollution mitigation.
Verified Answer
DM
Learning Objectives
- Acquire knowledge on the workings and outcomes of tradable pollution permits within the context of pollution mitigation.