Cap and trade is a _____ based plan. A limit is placed on emissions and prices are established in emissions permit markets. Emission taxes are a _______ based policy. A fee on emissions is set and the quantity of emissions is adjusted as polluters react to the fee.
A) price; quantity
B) quantity; price
C) technology; behavior
D) behavior; technology

Question

Quizplus · Accepted Answer

Cap and trade is a quantity-based plan because it sets a limit (quantity) on emissions and allows the market to determine the price of emissions permits. Emission taxes are price-based policies because they set a price (fee) on emissions, and the quantity of emissions is then adjusted based on how polluters react to the fee.

Cap and Trade Is a _____ Based Plan