1.)It has been proposed that a government agency be charged with the task of det

Question

1.)It has been proposed that a government agency be charged with the task of determining the amount of pollution which the atmosphere or a body of water can safely absorb, establish "rights" to this limited amount of pollution, and sell these limited rights to polluters in a cap-and-trade system. What would be the advantage of such a market for pollution rights? a.)Pollution would be eliminated because nobody would want to pay for such a right b.)The social consciousness of people would be raised as they obtain more appreciation for the importance of conservation c.)Government agencies can make a great deal of money d.)quality of water or air can be maintained at some acceptable standard through economic incentives 2.)If a good that generates negative externalities were priced to take into account these negative externalities, then its: a.)Price would increase but its output would remain constant b.)Price would decrease and its output would increase c.)Price would increase and its output would decrease d.)output would increase but its price would remain constant

Explanation / Answer

1.b.)The social consciousness of people would be raised as they obtain more appreciation for the importance of conservation

2.c.)Price would increase and its output would decrease

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