Economics (AS & A Level) · May / June 2025 · Paper 33 · Question 9
9708Government policies to achieve efficient resource allocation and correct market failure
A government introduces tradeable pollution permits to reduce pollution. What is an advantage of this scheme?
- AIt allows consumers to determine the optimum pollution level.
- BIt can provide rewards for firms that reduce pollution.
- CIt enables the government to raise revenue from the resale of permits.
- DIt uses the market system with no administrative costs.
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Correct answer: B. It can provide rewards for firms that reduce pollution.
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