Pinpointing the Source of an Externality: Production Method vs. Output Level

Evaluating Environmental Policy for a Factory

A government is concerned about air pollution from a country's fleet of gasoline-powered city buses. A new technology allows these buses to be converted to run on electricity, which produces zero local air pollution. The conversion has a one-time cost. Which of the following policies is most likely to be economically efficient at solving the pollution problem?

Policy Efficiency for River Pollution

Evaluating Policies for a Coastal Economy

A town's logging industry is causing significant soil erosion, which damages a local fishery. A new logging technique has been developed that prevents almost all erosion, though it increases the cost of harvesting timber. Given this situation, the most economically efficient government policy to address the problem is to impose a tax on each log sold, with the tax set high enough to reduce logging to a level where the fishery is no longer significantly harmed.

Analysis of an Inefficient Environmental Policy

A town's primary power source is a coal-fired plant that causes significant air pollution, a known health hazard. Cleaner alternatives exist, such as installing 'scrubbers' to capture emissions or building a new solar farm. Match each policy response or concept below with its most accurate economic description in this context.

Critiquing an Agricultural Pollution Policy

Critique of a Municipal Noise Pollution Policy

A country's textile industry uses dyes that pollute local rivers. If a new, non-polluting dye is developed that is only slightly more expensive, a government policy that simply limits the total amount of fabric the industry can produce would be considered economically ______ because it fails to target the specific cause of the pollution.