Unformatted text preview: ) This question can't be answered, since some essential information (such as Karen's
income, the pre- and post-tax prices of gas, etc.) is missing.
B) the same amount of both goods as before.
C) less gas and more of other goods.
D) less of other goods and more gas.
74. Which of the following is an environmental policy based on tradable pollution permits?
A) paying automobile drivers 10 cents for each 10% reduction in automobile
B) allowing automobile drivers to buy and sell the right to a certain level of
C) ignoring pollution and letting private markets operate without government
D) a charge to automobile drivers of 10 cents for 100 units of pollutants emitted
permits are an attempt to get efficient allocation of resources
1. Coasian solution- property rights must be well defined, not good for big societies
3. Gov't standards- quota
Version 1 Page 16 75. If the price of gasoline rises and stays high for an extended period of time, we exp...
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