Pollution Permits and Property Rights Flashcards
1
Q
What do pollution permits involve?
A
giving firms a legal right to pollute a certain amount
2
Q
How can pollution permits also be a form of revenue for firms?
A
by selling firms these permits to allow pollution.
3
Q
What is the purpose of a property rights?
A
To confer legal control or ownership of a good
4
Q
What is the tragedy of the commons caused by?
A
Lack of property rights
5
Q
What is the tragedy of the commons?
A
a situation where there is overconsumption of a particular product/service because rational individual decisions lead to an outcome that is damaging to the overall social welfare
