Question

Which of the following is true about the market-based approach to environmental responsibility?a. Market failure occurs when no markets exist to create a price for important social goods.b. Free market exchanges can guarantee optimal results for addressing issues related to externalities.c. The market-based approach always ensures that what is good and rational for a collection of individuals is also good and rational for a society.d. Markets can be very successful if important ethical and policy questions and policy decisions are left solely to the outcome of individual decisions.

Answer 1

(a). Market failure occurs when no markets exist to create a price for important social goods. When products and services are distributed inefficiently on the open market, market failure results.

MBIs are political initiatives that give producers and consumers incentives to alter their behavior, utilize resources more effectively, and lessen their adverse effects on the environment. By internalizing the external cost of production or consumption, MBIs aim to overcome the market failure of environmental externalities. on procedures or items. MBIs also make it easier to establish marketplaces and property rights for the use of environmental services. MBIs have a number of desirable qualities. They encourage flexibility in problem-solving to enhance resource utilization and environmental quality, and they also provide incentives to reduce environmental goal-achieving expenses. MBIs encourage innovation as well, which over time reduces the cost of adopting changes for environmental sustainability. MBIs permit any degree of pollution reduction when properly developed and put into practice.

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