... A market for pollution rights, such as in a cap-and-trade system, can be exp

Question

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A market for pollution rights, such as in a cap-and-trade system, can be expected to: Eliminate all pollution Produce a shortage of pollution Encourage potential polluters to increase emissions Provide potential polluters with a monetary incentive to reduce emissions Sometimes, public goods whose benefits are less than their costs still get produced because: The marginal benefit is still larger than the marginal cost Of externalities in production The benefits accrue to politically powerful government officials and their constituents Of market failures

Explanation / Answer

1.D
2.C

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