Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter5: Difficult Cases For The Market And The Role Of Government
Section: Chapter Questions
Problem 5CQ
Related questions
Question
When a quota is used with "cap and trade" to control an externality, the government must determine both _____ and _____.
Select one:
a. the socially optimal quantity; the socially optimal price
b. how large a tax to use; which external impact to address
c. how to bargain with companies; whether to use a subsidy
d. the socially optimal quantity; how to distribute that quantity across suppliers
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