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April 20, 2024, 05:16:20 am

Author Topic: Question Help  (Read 639 times)  Share 

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MrBrillsbury

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Question Help
« on: February 12, 2017, 04:51:21 pm »
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In the multiple choice quesitons for the first Chapter, there is a question that says the following.

Tastes and preferences in an economy change such that people are more concerned about climate change and protecting the natural environment. Based on these changes, allocative and intertemporal efficiency is more likely to be achieved if:

 a) The government provides incentives for households to purchase solar panels.
 b) The government introduces a tax on each unit of pollution.
 c) Subsidies directed towards coal miners are removed.
 d) All of the above.

I'm aware that the answer is 'b'. Could someone please explain why?

Thank you!