Government solutions to externality problems include: I. Pigouvian taxes. II. tradeable allowances. III. command and control.
A) I only
B) I and III only
C) II and III only
D) I, II, and III

Question

Quizplus · Accepted Answer

Government solutions to externality problems include all three: Pigouvian taxes (I) to correct negative externalities by taxing the activity, tradeable allowances (II) to limit the total level of an externality like pollution, and command and control (III) which involves regulations and standards to directly control activities causing externalities.

Government Solutions to Externality Problems Include: I