It has been proposed that a government agency be charged with the task of determining the amount of pollution that the atmosphere (or a body of water) can safely absorb, establish "rights" to
This limited amount of pollution, and sell those limited amount of rights to ﬁrms. The ﬁrms can then
Buy and sell these rights among themselves later. This approach is known as the
A) taxes and subsidies system.
B) cap-and-trade system.
C) property rights system.
D) market and command system.

Question

Quizplus · Accepted Answer

The proposal mentioned in the question refers to the cap-and-trade system, as it involves setting a cap on the amount of pollution allowed and allowing firms to trade rights to emit that pollution. This system has been used in various forms, including under the Clean Air Act in the United States. The other choices do not accurately describe the proposal in the question.

It Has Been Proposed That a Government Agency Be Charged