Problem
1. Why are the marginal benefit and marginal abatement cost of pollution considered equivalent?
2. How do regulators use Pigouvian taxes to produce efficient outcomes?
3. Describe how tradable pollution permits can be used to address pollution.
4. Compare and contrast Pigouvian taxes and quantity-based solutions to externalities. What are some of the advantages and disadvantages of each?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.