Economics (AS & A Level) · May / June 2024 · Paper 33 · Question 11
9708Government policies to achieve efficient resource allocation and correct market failure
The government can use policies to try and reduce the environmental damage caused by the amount of rubbish (garbage) created by firms and households. Which policy to reduce rubbish is most likely to lead to government failure?
- Aan incentive payment for firms who reduce the levels of rubbish
- Ba tax on the amount of rubbish a firm or household creates
- Can advertising campaign about the problems created by rubbish
- Dgovernment grants to firms researching how to safely dispose of rubbish
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Correct answer: B. a tax on the amount of rubbish a firm or household creates
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