Consider two ways to reduce pollution--establishment of taxes on the pollution or the sale of permits to polluters. Which of the following best describes the outcome?
Consider two ways to reduce pollution--establishment of taxes on the pollution or the sale of permits to polluters. Which of the following best describes the outcome?
Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter10: Externalities
Section: Chapter Questions
Problem 7PA
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Question 26
Consider two ways to reduce pollution--establishment of taxes on the pollution or the sale of permits to polluters. Which of the following best describes the outcome?
a
Both methods can result in the same reduction of pollution, but the permits may achieve that goal with lower administrative costs.
b
Both methods can result in the same reduction of pollution, but the permits may achieve that goal with higher administrative costs.
c
The permits will allow more pollution, but both methods will have the same administrative costs.
d
Both methods can result in the same reduction of pollution and the same adminstrative costs.
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