Which of the following would be true of an increase in automobile fuel taxes? (i) private incentives are used to reduce automobile pollution
(ii) private incentives are used to reduce highway congestion
(iii) government directly controls the amount of automobile fuel that is purchased
A) (i) and (ii) only
B) (ii) and (iii) only
C) (iii) only
D) (i), (ii) and (iii)

Question

Quizplus · Accepted Answer

An increase in automobile fuel taxes would increase the private cost of driving, leading individuals to reduce their driving and thus reducing automobile pollution and highway congestion. However, the government does not directly control the amount of automobile fuel that is purchased, so (iii) is not true.

Which of the Following Would Be True of an Increase