1.Under international emissions trading,

a) each country receives an equal number of licenses before trading begins.

b) countries trade licenses until they all have the same marginal cost of reduction.

c) the price of a license is higher than the marginal cost of reduction.

d) regulating the trade of licenses is generally a good idea.

2.Recall the example from lecture about the Electric Company and Laundromat. Assigning pollution rights to the Electric Company is consistent with which of the following principles?

a) The Tragedy of the Commons

b) The Marginal Cost of Deterrence

c) The Normative Coase Theorem

d) The Normative Hobbes Theorem