Question

7. Suppose a government decides to iss ue a limited number of tradable pollution permlilts Which of the following statements is true? A. Firms that can easily and at low cost reduce their level of pollution will find it beneficial B. to purchase these tradable pollution permits. When the government issues these tradable pollution permits, it effectively creates a market for the right to pollute. C. Firms that sell their tradable pollution permits do not fully understand the costs th will incur when they try to reduce the level of pollution they create. D. None of the above statements is true.

Answer 1

A) Firms that can easily and at low cost reduce their level of pollution will find it beneficial to purchase these tradable pollution permits is true.