Economists generally prefer emissions trading schemes to market regulation because it creates a market incentive for companies to reduce their emissions in the most cost-effective way. This approach allows for flexibility in meeting emission reduction targets while minimizing the economic impact on businesses.

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Economists Prefer

Question 55

Multiple Choice

Economists prefer:

A) regulation to solve the problem of emissions.
B) emissions trading schemes to market regulation.
C) the political agenda to control the level of emissions.
D) government to prescribe the technology to be used for emissions reduction.

Correct Answer: