Which of the following is not an effective method to reduce negative externalities?
A) relying on voluntary compliance
B) taxing the output of industries that pollute
C) creating legal environmental standards
D) increasing public spending on cleanup and reduction of pollution

Question

Quizplus · Accepted Answer

Relying on voluntary compliance is not an effective method as it gives the polluting industries the option to ignore the externalities and continue polluting. Option B, C, and D are effective methods to reduce negative externalities. Taxing the output of industries that pollute and creating legal environmental standards incentivizes them to reduce pollution, and increasing public spending on cleanup and reducing pollution helps to rectify the damage caused by the negative externalities.

Which of the Following Is Not an Effective Method to Reduce