Carbon dioxide emissions have been linked to increased air pollution. Suppose that, to reduce carbon dioxide emissions, the government orders every factory to reduce its emissions to no more than 100 tons of carbon dioxide per decade. This is an example of: Command-and-control policy (regulation) Emissions trading Effluent taxation Economist Ronald Coase argues that the private sector can achieve social efficiency with minimal government intervention. According to the Coase Theorem, if property rights are clearly established, private market negotiations can resolve problems caused by externalities. However, relatively few environmental problems readily qualify for Coase Theorem solutions for all the following reasons except: Since many third parties may be involved, free-rider problems occur. People's willingness to pay to acquire a property right is greater than the compensation they require to give up the same property right. Private transactions costs are substantial.
Carbon dioxide emissions have been linked to increased air pollution. Suppose that, to reduce carbon dioxide emissions, the government orders every factory to reduce its emissions to no more than 100 tons of carbon dioxide per decade. This is an example of: Command-and-control policy (regulation) Emissions trading Effluent taxation Economist Ronald Coase argues that the private sector can achieve social efficiency with minimal government intervention. According to the Coase Theorem, if property rights are clearly established, private market negotiations can resolve problems caused by externalities. However, relatively few environmental problems readily qualify for Coase Theorem solutions for all the following reasons except: Since many third parties may be involved, free-rider problems occur. People's willingness to pay to acquire a property right is greater than the compensation they require to give up the same property right. Private transactions costs are substantial.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Carbon dioxide emissions have been linked to increased air pollution. Suppose that, to reduce carbon dioxide emissions, the government orders every factory to reduce its emissions to no more than 100 tons of carbon dioxide per decade. This is an example of:
Command-and-control policy (regulation)
Emissions trading
Effluent taxation
Economist Ronald Coase argues that the private sector can achieve social efficiency with minimal government intervention. According to the Coase Theorem, if property rights are clearly established, private market negotiations can resolve problems caused by externalities. However, relatively few environmental problems readily qualify for Coase Theorem solutions for all the following reasons except:
Since many third parties may be involved, free-rider problems occur.
People's willingness to pay to acquire a property right is greater than the compensation they require to give up the same property right.
Private transactions costs are substantial.
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