Economic Analysis of Social Issues 1st Edition by Alan Grant

Exercise 6

Which of the following is not one of the principles for regulating pollution in an ideal world?
A) Regulations should be designed to make polluters internalize costs of externalities.
B) The goal of regulation should be to eliminate pollution.
C) Regulations are necessary only when transactions costs preclude bargaining between polluters and victims.
D) Ideally, regulations should achieve the outcomes that affected parties would have reached had transactions costs not been so high.
E) All of the above are goals that regulators should strive for in regulating pollution.