It is the custom for paper mills located alongside the Layzee River to discharge waste products into the river. Operators of hydroelectric generating plants on the river find they must clean up the river's water before it flows through their equipment. Refer to the above information. Which of the following policies would be most appropriate for dealing with this problem?
A. Levy a tax on the producers of electricity and use the tax revenues to clean up the river.
B. Levy a tax on the consumers of electricity and use the tax revenues to subsidize the consumers of paper goods.
C. Levy a tax on the producers of paper goods and use the tax revenues to clean up the river.
D. Levy a tax on the consumers of paper goods and use the tax revenues to conduct research on new energy sources.
Answer: C
You might also like to view...
If the demand for one good decreases when the price of another good increases, the two goods are ________ goods
A) normal B) inferior C) complementary D) substitute
The actions that the Federal Reserve takes to ________ to pursue macroeconomic policy objectives refer to monetary policy
A) manage the money supply and interest rates B) set tax rates C) regulate imports and exports D) establish exchange rates
Commercial banks are financial intermediaries, as are ________
A) household savers B) state and local governments C) insurance companies D) organized exchanges
An interest in being reelected encourages politicians to support policies that
What will be an ideal response?