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Unformatted text preview: always delivers greater emissions reductions than a carbon tax.
(4) For any given reduction in emissions, the market price of permits under a TEPS is
equal to the tax rate under a carbon tax.
D. (1) and (2) only.
(1) and (3) only.
(1), (2) and (4) only.
All. 8. “A carbon tax that does not achieve a significant reduction in emissions is a failed
policy”. True of false?
9. Suppose an individual would be equally happy with (i) a new car and $15,000 less
money; and (ii) no new car but no less money. Then her willingness-to-pay (WTP) for the
new car is
A. less than $15,000.
B. equal to $15,000.
C. greater than $15,000.
D. None of the above.
10. “WTP cannot measure the true value an individual places on something because WTP
is constrained by wealth”. True of false?
11. Suppose the owner of a house would be equally happy between (i) retaining his
house; and (ii) giving up his house in return for $500,00. Then the value he places on his
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- Spring '14