A private company operates a coal mine which employs 400 workers. The mining operations have polluted the environment and created external costs. If the government intervenes, how could it internalise the externality? A close part of the mine and import the coal B levy an additional tax on the miners' wages equal to the external cost C pay for the external costs of restoring the environment after mining D place a tax equivalent to the external cost on the output the company produces
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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