Question 26 Consider two ways to reduce pollution--establishment of taxes on the pollution or the sale of permits to polluters. Which of the following best describes the outcome? aBoth methods can result in the same reduction of pollution, but the permits may achieve that goal with lower administrative costs.bBoth methods can result in the same reduction of pollution, but the permits may achieve that goal with higher administrative costs.cThe permits will allow more pollution, but both methods will have the same administrative costs.dBoth methods can result in the same reduction of pollution and the same adminstrative costs.

Although taxes and pollution permits both result in same level of pollution reduction, the…

Answered: Consider two ways to reduce…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 8PA

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Question 26

Consider two ways to reduce pollution--establishment of taxes on the pollution or the sale of permits to polluters. Which of the following best describes the outcome?

Both methods can result in the same reduction of pollution, but the permits may achieve that goal with lower administrative costs.

Both methods can result in the same reduction of pollution, but the permits may achieve that goal with higher administrative costs.

The permits will allow more pollution, but both methods will have the same administrative costs.

Both methods can result in the same reduction of pollution and the same adminstrative costs.

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