Question

Economists argue that appropriate corrective taxes or tradable pollution rights will result in efficient pollution reduction. Which of the following statements supports this claim?1. The government does not have to figure out which firms can reduce pollution the most. 2. Corrective taxes or tradable pollution rights give firms greater incentives to reduce pollution. 3. With corrective taxes or tradable pollution rights, firms spend less in research on pollution control.

Answer 1

Answer: 2. Corrective taxis or tradable pollution rights give firms greater incentive to reduce pollution

Explanation:

corrective taxes and tradable pollution rights give firms a greater incentive to reduce pollution. Firms always want to minimize costs ,if the government imposes corrective taxes businesses will have an incentive to reduce pollution because they will not pay the imposed tax if they succeed in reducing Pollution