Hi Relona! Thanks for your question, and happy to help you out with this
Answer choice (E) is wrong for a different reason than the use of the word "effective." Both answer choice (A), the correct answer choice, and answer choice (E) actually use the word "effective." For Specific Reference questions, it is always helpful to read a few lines before and a few lines after the line referred to in the question for context. The second paragraph does discuss the idea about what a carbon tax should be to be effective.
This question in particular asks us the purpose of the author mentioning one writer's estimates. The sentence before this line reference tells us that it does not seem like it should be difficult to determine an effective carbon tax. The author then mentions the example of the estimates from one writer to give an example of such an estimate. Looking at the answer choices, we want to find the answer choice that most closely matches this prephrase.
The reason that answer choice (E) is wrong is that the example referred to just explains the differing carbon taxes that could be applied to different goods to be effective. Answer choice (E), however, says that the purpose of the example is to show how this tax can be calculated. From the information in the passage, we do not know how this writer came up with the size of the effective carbon tax; all we know is the tax that would be placed on each good.
Answer choice (A) is the correct answer choice, and it matches our prephrase most closely. Answer choice (A) tells us that the purpose of the line referenced is to give a general example of the size an effective carbon tax. The passsage supports this answer choice, since the line referenced in the question discusses what the size of carbon taxes that this writer proposes.
To sum up, the reason answer choice (A) is right and answer choice (E) is wrong is not that answer choice (E) uses the word "effective," since both answer choices use this word and the paragraph that contains the line reference does discuss effective carbon taxes. Instead, answer choice (E) is incorrect because the line referenced does not tell us about the writer's method in determining an effective carbon tax.
I hope this helps, and please let me know if you have any other questions!
