Suppose an industry emits a negative externality such a pollution and the possible methods to internalize the externality are command-and-control policies, pigovian taxes, and tradable pollution permits. If economists were to rank these methods for internalizing a negative externality based on efficiency ease of implementation and the incentive for the industry to further reduce pollution in the future, they would probably rank them in the following order (from most favored to least favored) ?
A. tradable pollution permits, Pigouvian taxes, command-and-control policies

B. They would all rank equally high because the same result can be obtained from any one of the policies

C. Pigouvian taxes, command-and-control policies, tradable pollution permits.

D. tradable pollution permits command-and-control policies, Pigovian taxes.

E. command-and-control policies, tradable pollution permits, Pigovian taxes.

Be the first to comment if anything wrong with this mcq
Your comment successfully submitted!
It will automatically posted after review and approval by our staff member.