Using Tradable Allowances Instead of Quotas May Be a Better

Multiple Choice

Using tradable allowances instead of quotas may be a better solution to the provision of common resources because they:

A) allocate the good in a less efficient way, and quotas do not.
B) ensure that the resource is allocated to those with the highest willingness to pay, while quotas do not.
C) assign private property rights-and an incentive, as owners, which means common resource now get overused, and quotas do not.
D) allow the government to set a specific amount of the good to be consumed, while quotas do not.