Which of the following is NOT a way that governments require

Which of the following is NOT a way that governments require firms to take externalities into account? Select one: a marketable permits for pollution b. better defined property rights c, command and control regulations -0)-- d. voluntary pollution cutbacks

Solution

The government can respond to externalities by either using command and control policies to regulate the behavior directly or implement market based policies such as taxes , subsidies to incentives private individuals to change their own behaviour. However(d) in case of voluntary actions of the firm\'s to cutback pollution does not need any government intervention. Hence answer is d.