# Suppose an industry emits a negative externality such a pollution and the possible methods to internalize the externality are command-and-control policies, pigovian taxes, and tradable pollution permits. If economists were to rank these methods for internalizing a negative externality based on efficiency ease of implementation and the incentive for the industry to further reduce pollution in the future, they would probably rank them in the following order (from most favored to least favored) ? with Answer - Economics Mcqs | TestPrep

> Solved MCQ: Suppose an industry emits a negative externality such a pollution and the possible methods to internalize the externality are command-and-control policies, pigovian taxes, and tradable pollution permits. If economists were to rank these methods for internalizing a negative externality based on efficiency ease of implementation and the incentive for the industry to further reduce pollution in the future, they would probably rank them in the following order (from most favored to least favored) ? Correct Answer: B. tradable pollution permits, Pigouvian taxes, command-and-control policies. Verified answer explanation for FPSC, PPSC, MDCAT, NTS, and CSS competitive exam preparation.

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# Suppose an industry emits a negative externality such a pollution and the possible methods to internalize the externality are command-and-control policies, pigovian taxes, and tradable pollution permits. If economists were to rank these methods for internalizing a negative externality based on efficiency ease of implementation and the incentive for the industry to further reduce pollution in the future, they would probably rank them in the following order (from most favored to least favored) ?

Direct Answer & Quick Reference

The correct option is **B. tradable pollution permits, Pigouvian taxes, command-and-control policies**.

A. Pigouvian taxes, command-and-control policies, tradable pollution permits.

B. tradable pollution permits, Pigouvian taxes, command-and-control policies **(Correct Answer)**

C. tradable pollution permits command-and-control policies, Pigovian taxes.

D. command-and-control policies, tradable pollution permits, Pigovian taxes.

E. They would all rank equally high because the same result can be obtained from any one of the policies

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Verified Key: B. tradable pollution permits, Pigouvian taxes, command-and-control policies
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