The requirement that a minimum volume of ethanol is blended into the U.S. fuel supply is an example of
A)a corrective tax.
B)a corrective subsidy.
C)a command-and-control policy.
D)the Coase Theorem.

Question

​The requirement that a minimum volume of ethanol is blended into the U.S. fuel supply is an example of
A)​a corrective tax.
B)​a corrective subsidy.
C)​a command-and-control policy.
D)​the Coase Theorem.

Quizplus · Accepted Answer

The requirement for a minimum volume of ethanol to be blended into the U.S. fuel supply is an example of a command-and-control policy. This is because the government is mandating a specific requirement for the fuel supply, rather than using market-based solutions like corrective taxes or subsidies, or relying on negotiation and bargaining like the Coase Theorem.

​The Requirement That a Minimum Volume of Ethanol Is Blended

The Requirement That a Minimum Volume of Ethanol Is Blended