An example of the specificity rule in action is:
A)restricting imports in order to reduce environmental pollution.
B)taxing the consumption of a product whose production creates a great deal of pollution.
C)taxing the production of a product whose production creates a great deal of pollution.
D)imposing price floors on "clean" products as a way to increase the demand for these products.

Question

Quizplus · Accepted Answer

The specificity rule states that taxes should be specific, meaning they should be levied on a particular good or service in order to discourage its production or consumption. Taxing the production of a product whose production creates a great deal of pollution is an example of the specificity rule in action, as it targets a specific behavior (i.e. pollution-causing production) rather than a broad category of goods or services. This would incentivize producers to adopt cleaner production methods or technology, ultimately reducing the amount of pollution generated.

An Example of the Specificity Rule in Action Is