Most economists prefer corrective taxes to regulation as a way to correct the problem of pollution because
A)the market-based solution is less costly to society.
B)the market-based solution can result in a greater reduction in pollution.
C)the market-based solution raises revenue for the government.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Corrective taxes create a market-based solution for reducing pollution. The tax incentivizes polluters to reduce their emissions, which can ultimately result in a greater reduction in pollution than regulation. Additionally, the revenue generated from the tax can be used by the government to address the negative externalities of pollution. Overall, corrective taxes tend to be less costly to society because they allow for flexibility and innovation in finding pollution-reducing solutions. Therefore, all of the above reasons make corrective taxes preferable to regulation.

Most Economists Prefer Corrective Taxes to Regulation as a Way