suppose that upon leaving this exam you are confronted by Mr. Premise, a member of the lobby group, society for the legal and unrestricted discharge of garbage and emissions. Mr. premise states "I do not understand why anyone would suggest the use of taxes or regulations in pollution problems. Taxes are unfair and regulations are costly and inefficient. The best approach is to trust the market. Firms will control their emissions because it is cost effective for them to do so. The only policy that may need to be applied is the use of market permits. This market would function completely and permit prices would cleary represent all relevant costs