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9. If a regulator is uncertain about the marginal cost of pollution abatement then using a pollution fee system will be more efficient than the marketable pollution permit system when
a. the marginal social benefit curve is relatively steep and marginal cost turns out to be higher than expected.
b. the marginal social benefit curve is relatively steep and marginal cost turns out to be lower than expected.
c. the marginal social benefit curve is relatively flat and marginal cost turns out to be higher than expected.
d. Both (a) and (b) are correct.
9. If a regulator is uncertain about the marginal cost of pollution abatement then using a pollution fee system will be more efficient than the marketable pollution permit system when
a. the marginal social benefit curve is relatively steep and marginal cost turns out to be higher than expected.
b. the marginal social benefit curve is relatively steep and marginal cost turns out to be lower than expected.
c. the marginal social benefit curve is relatively flat and marginal cost turns out to be higher than expected.
d. Both (a) and (b) are correct.
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Raushan RajLv8
29 Oct 2020