# Which of the following is true regarding tradable pollution permits and Pigouvian taxes ? with Answer - Economics Mcqs | TestPrep

> Solved MCQ: Which of the following is true regarding tradable pollution permits and Pigouvian taxes ? Correct Answer: B. Pigouvian taxes and tradable pollution permits create an efficient market for pollution.. Verified answer explanation for FPSC, PPSC, MDCAT, NTS, and CSS competitive exam preparation.

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# Which of the following is true regarding tradable pollution permits and Pigouvian taxes ?

Direct Answer & Quick Reference

The correct option is **B. Pigouvian taxes and tradable pollution permits create an efficient market for pollution.**.

A. All of these answers are true

B. Pigouvian taxes and tradable pollution permits create an efficient market for pollution. **(Correct Answer)**

C. Tradable pollution permits efficiently reduce pollution only if they are initially distributed to the firms that can regulator pollution at the lowest cost.

D. To set the quantity of pollution with tradable pollution permits, the regulator must know everything about the demand for pollution rights.

E. Pigovian taxes are more likely to reduce pollution to a targeted amount than tradable pollution permits.

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Verified Key: B. Pigouvian taxes and tradable pollution permits create an efficient market for pollution.
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Verified against official examination board answer keys and standard curriculum textbooks.

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