Question

government - imposed quantitative limits on the amount of pollution firms are allowed is an example of
a. a tradable emission allowance system of pollution control.
b. a command - and - control approach to pollution reduction.
c. a coasian solution to pollution reduction.
d. the pigovian method of pollution control.

Explanation:

• Option A: A tradable emission allowance system involves firms being able to buy and sell allowances to emit a certain amount of pollution. This is not just a simple quantitative limit imposed by the government.
• Option B: A command - and - control approach means the government directly sets rules and limits, such as quantitative limits on pollution. This matches the description in the question.
• Option C: A Coasian solution focuses on private bargaining between parties affected by the externality (pollution) without direct government - imposed quantity limits.
• Option D: The Pigovian method involves using taxes (Pigovian taxes) to internalize the externality of pollution, not quantity limits.

Answer:

B. a command - and - control approach to pollution reduction.