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    Modern Principles of Economics Study Set 2
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    Exam 10: Externalities: When the Price Is Not Right
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    The Main Difference Between Tradable Allowances and Taxes Is
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The Main Difference Between Tradable Allowances and Taxes Is

Question 100

Question 100

Multiple Choice

The main difference between tradable allowances and taxes is:


A) only large firms may trade pollution allowances.
B) tradeable allowances result in a more efficient outcome.
C) taxes decrease firms' profits.
D) purely political.

Correct Answer:

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