Economic Incentives Are Designed to Make Individual Self-Interest Coincide with Social

Multiple Choice

Economic incentives are designed to make individual self-interest coincide with social interest. According to economists, which of the following methods of pollution control best uses economic incentives to reduce pollution?

A) rewarding environmental groups for monitoring the activities of private firms that produce products which generate pollution
B) imposing quantitative limits on the amount of pollution and imposing a penalty for non-compliance with these limits
C) requiring the installation of specific pollution control devices
D) instituting a system of tradable emissions allowances