It Is the Custom for Paper Mills Located Alongside the Layzee

question 11

Multiple Choice

It is the custom for paper mills located alongside the Layzee River to discharge waste products into the river. As a result, operators of hydroelectric power-generating plants downstream along the river
find that 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 Pigovian tax on the consumers of paper products and use the tax revenues to conduct research on new energy sources
• B) levy a Pigovian tax on the consumers of electricity and use the tax revenues to subsidize the consumers of paper products
• C) levy a Pigovian tax on the producers of electricity and use the tax revenues to clean up the river
• D) levy a Pigovian tax on the producers of paper products and use the tax revenues to clean up the river

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Definitions:

1970s

A decade known for significant cultural, political, and technological changes worldwide, including the end of the Vietnam War and the beginning of the environmental movement.

Manufacturers

Entities engaged in the industrial production of goods, transforming raw materials into finished products on a large scale.

2000 Presidential Election

The United States presidential election held in 2000, notoriously known for its close count and controversy in Florida.

Affirmative Action

Policies and practices within a government or organization seeking to include particular groups based on their gender, race, sexuality, creed, or nationality in areas in which they are underrepresented or have suffered from discrimination.