A cap and trade policy is desirable because it

a. Reward firms for reducing pollution.

b.has proven to be an inefficient way to reduce pollution

c. is not a market-based solution to pollution.

d. punishes all firms equally.

The first stage of the production function occurs when the firm experiences

a. negative returns.

b. constant returns.

c.diminishing returns.

d. increasing returns.

Which of the following is an example of a command economy?

a. hunter-gatherer systems.

b. decisions by individuals to satisfy their own self-interest.

c. centralized decision-making by the Chinese government.

d. "sin taxes" on alcohol and tobacco.

Which of these strategies would NOT solve the tragedy of the commons?

a. Encourage local solutions to the tragedy of the commons.

b.Solve it through communal ownership.

c.Divide the commons and allow private ownership of each share.

d. Government takes ownership and regulates use of the commons.