Question

Which of the following is not true about a cap-and-trade system: Select one:
a. A cap-and-trade system is considered a market based policy instrument
b. The marginal cost of abatement will be equal across all firms
c. A cap-and-trade system is considered a command and control regulation
d. The low abatement cost firms will sell permits to high abatement cost firms

Answer 1

Answer:

c. A cap-and-trade system is considered a command and control regulation

Explanation:

The both are different systems as the cap-and-trade system which permits to trade and is more efficient in most of the markets. Nevertheless, the command and control system is used to laws it is not the most efficient, considering as well that is onerous and expensive for the government.