If those who consumed common resources were subject to a tax that was equal to the external costs that they imposed due to the negative externality created,their demand curve would shift:
A) up and they would consume more.
B) down and they would consume less.
C) down and they would consume more.
D) up and they would consume less.

Question

Quizplus · Accepted Answer

The tax would increase the cost of consuming the common resources to account for the negative externality they create. This higher cost will make people less willing to buy these resources, causing a shift in the demand curve to the left, leading to a decrease in consumption.

If Those Who Consumed Common Resources Were Subject to a Tax