Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 10 - Part IV - Externalities - Quick Check Multiple Choice - Page 213: 4

Answer

Answer choice 'a'.

Work Step by Step

Command and control regulation is favored by economists because it is very hard for them to quantify (in terms of the cost of the tax) to add to the product. Because it is very hard to quantify an externality, economists think it is better and simpler to just set a limit for something, as is done in command and control regulation, instead of regulating it through taxes. And so, command and control regulation is favored over corrective taxes by economists.
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