Automobile emissions generate pollution and cause higher costs and discomfort to residents of a city.In this case:
A)too little of society's resources is being used to operate automobiles.
B)the externality can be internalized into the market by imposing a specific tax on drivers.
C)there is an external benefit to society from operating automobiles.
D)the externality can be internalized into the market by granting a specific subsidy to drivers.

Question

Quizplus · Accepted Answer

Imposing a specific tax on drivers who generate automobile emissions would make them pay for the negative externality they impose on others. This would increase the cost of operating an automobile and incentivize individuals to seek alternative modes of transportation, such as public transportation, walking, or biking. This would reduce the overall pollution generated by automobiles and result in a more efficient allocation of society's resources.

Automobile Emissions Generate Pollution and Cause Higher Costs and Discomfort