2b. When emissions from multiple sources do not mix uniformly, it implies that the marginal benefits of abatement may vary and therefore a uniform tax will not necessarily be cost effective.

A. True

B. False

2c. Policy creating pollution standards where regulators have full information is:

A. Preferred by firms, but not by a society as a whole because it is Inefficient

B. Always inefficient because of the extra burden it places on firms

C. Efficient and preferred by firms compared to a tax policy

2d. When considering the optimal level of pollution abatement, the equimarginal principle says that:

A. The total benefits of pollution abatement must equal the total costs.

B. The marginal benefits of the last unit of pollution abatement must equal the marginal costs of the last unit of pollution abated.

C. There must be zero abatement at the margin.

D. Pollution levels must be equal across firms.

E. b and d are both true.

F. None of the above.