Refer to the information below.Which of the following policies would be most appropriate for dealing with this problem? 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 that they must clean up the river's water before it flows through their equipment.
A)Levy a tax on the consumers of paper products and use the tax revenues to conduct research on new energy sources.
B)Levy a tax on the consumers of electricity and use the tax revenues to subsidize the consumers of paper products.
C)Levy a tax on the producers of electricity and use the tax revenues to clean up the river.
D)Levy a tax on the producers of paper products and use the tax revenues to clean up the river.

Question

Quizplus · Accepted Answer

The most appropriate policy for dealing with this problem would be to levy a tax on the producers of paper products and use the tax revenues to clean up the river. This policy would directly target the source of the problem and incentivize paper mills to find alternative solutions for waste disposal. Levying a tax on electricity consumers or producers would not address the root cause of the pollution, and using tax revenues to conduct research on new energy sources or subsidize the consumers of paper products would not directly address the problem of pollution in the Layzee River.

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