Topic 4.

Targets can be useful because

• they are legally binding

• they provide a focus for government

  efforts

• they are market-based

• they harness self-interest

Which of the following is not a reason why market-based policies are typically preferred to

regulatory measures?

• The economy is complex and market-based measures utilise local knowledge of firms

• Regulatory measures are appropriate for most situations but are unpopular

• Market-based policies harness the self-interest of market participants

• Market-based policies allow firms and individuals to make decisions that suit them the

  best

Pigouvian tax levied on an activity with negative externalities will lead to

• a lower equilibrium price and price

• a higher equilibrium price and lower quantity

• a privately optimal outcome

• a higher equilibrium price and quantity

What must the Australian government consider when devising and implementing

environmental policies?

• Australia’s constitution

• International competitiveness

• The media

• All of the above

The Paris Agreement is:

• a treaty.

• not legally binding.

• a declaration.

• a national agreement.