Question

A spillover and a negative externality are considered the same thing.

True

False  

Question 2

A pollution tax allows regulators to set the __________of pollution in a given geographic area.

Question 3

Which type of market based regulation works best with an industry that doesn't have a strong interest in trading.

		a pollution tax
		marketable permits
		cap and trade
		a combination of the three
		better defined property rights

Answer 1

Ans:

1) True

A spillover is the impact of an event or an unexpected consequence that occur in some unrelated context.example of spillover is externalities.

negative externality is the cost or impact to a third party as a result of an economic transaction who is not a party to the transcation.

2) amount

A pollution tax allows regulators to set the amount of pollution in a given geographic area.

3) a pollution tax

In an industry that doesn't have a strong interest in trading a pollution tax as regulation works best.