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Sometimes market activities production buying and selling

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Sometimes market activities (production, buying, and selling) have unintended positive or negative effects outside the market's scope. These are called externalities.  As a policy maker concerned with correcting the effects of gases and particulates emitted by and local power plant, answer the following questions:

  • What two policies could you use to reduce the total amount of emissions? 
  • Why do you think they each would work? 
  • What would the benefits of each action be (besides emissions reduction)? 
  • What would the costs of each action be? 
  • How would you decide what was the best level of emission reduction?

Reference no: EM13243618

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