Question

A county commission is considering assessing a tax on residential water use above a certain amount. What might this tax be trying to discourage?
A- watering of lawns and other wasteful home practices

B- the routine practice of offering water at restaurants

C- the construction of new neighborhoods of sensitive lands

D- increasing construction of municipal pools and water parks

Answer 1

A. 

The aim of a tax on a valuable resource, in this case residential water use, is to reduce wasteful practices. In this case the county is considering a special tax when residential water use is ABOVE a certain amount. This is an effective mechanism to reduce wastage by causing high users to incur more cost. Everyone will still pay for their water consumption in the normal way (typically by a $/unit cost), however the tax will take effect when the residential water consumption reaches a certain point. This penalises high users of water by forcing them to pay more for a valuable resource. Note that essential services like energy and water are often subsidised in society. This means that we do not pay the true cost associated with the use of the resource. Setting a tax that applies to those that consume over a certain threshold helps to reduce wastage of an undervalued essential resource such as water or energy.

Answer 2

Answer:

A

Explanation: