The people of Chingola district a town in the Copperbelt province of Zambia are concerned over the activities of the local investor whose copper mining activities have resulted in the pollution of the Kafue river. Some commentators have argued that there is need for Government to come up with a tax to deal with this externality. Using your knowledge of Public sector economics, Identify the type of externality and how large tax rate should the government use in order to eliminate this externality? Why does this tax rate work? Use a diagram to illustrate your answer.
The people of Chingola district a town in the Copperbelt province of Zambia are concerned over the activities of the local investor whose copper mining activities have resulted in the pollution of the Kafue river. Some commentators have argued that there is need for Government to come up with a tax to deal with this externality. Using your knowledge of Public sector economics, Identify the type of externality and how large tax rate should the government use in order to eliminate this externality? Why does this tax rate work? Use a diagram to illustrate your answer.
Chapter1: Making Economics Decisions
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- The people of Chingola district a town in the Copperbelt province of Zambia are concerned over the activities of the local investor whose copper mining activities have resulted in the pollution of the Kafue river. Some commentators have argued that there is need for Government to come up with a tax to deal with this externality. Using your knowledge of Public sector economics, Identify the type of externality and how large tax rate should the government use in order to eliminate this externality? Why does this tax rate work? Use a diagram to illustrate your answer.
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