Asked by priya tripathi on Jul 30, 2024
Verified
Refer to Figure 16.5. Suppose that instead of a tax, the government uses standards to achieve the emission reductions, requiring that each company cut its original emissions in half rather than allowing each company to choose emissions based on their costs. Compared to the outcome under the tax, this common standard would result in
A) Alpha gaining more than Beta loses.
B) Alpha gaining less than Beta loses.
C) Beta gaining more than Alpha loses.
D) Beta gaining less than Alpha loses.
Government Standards
Regulations established by governments to ensure products, services, and processes meet specific requirements for quality, safety, and efficiency.
Emission Reductions
Efforts and measures taken to decrease the amount of pollutants and greenhouse gases released into the environment.
- Explore the impact of external influences and state interference on community welfare.
- Evaluate the implications of different government strategies on environmental outcomes.
Verified Answer
ZK
Zybrea KnightAug 02, 2024
Final Answer :
B
Explanation :
Under a common standard requiring each company to cut emissions in half, Alpha, which has lower costs for reducing emissions, would gain less because it is not able to take advantage of its lower costs to the same extent. Beta, with higher costs for reducing emissions, would lose more because it is forced to reduce emissions by the same proportion as Alpha, despite its higher costs. This results in Alpha gaining less than Beta loses.
Learning Objectives
- Explore the impact of external influences and state interference on community welfare.
- Evaluate the implications of different government strategies on environmental outcomes.
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