Question

The ___________ occurs when the government sets a quantitative goal of pollution reduction and it is a cost ______ method of pollution reduction.

Tax: Efficient

Command and Control: Inefficient

Command and Control: Efficient

Cap and Trade: Inefficient

Answer 1

The answer is B

Command-and-control regulation is a regulatory measure or method which sets some specific limits for pollution emission and/or mandates that specific pollution control technologies must be used to curb the pollution.

Its three shortcomings are :
• It provide no incentive for going beyond the limits they set.
• It offers limited flexibility on where and how to reduce pollution.
• It often has politically-motivated loopholes.
These three shortcomings make it an inefficient measure as as compared to the cap and trade which provides incentives.