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

Question

Quizplus · Accepted Answer

The negative externality of automobile emissions can be internalized through the imposition of a specific tax on drivers. This tax will incentivize drivers to drive less or switch to alternative modes of transportation, which will reduce pollution and health costs for pedestrians while also minimizing discomfort for city residents. It will also generate revenue that can be used for public transportation infrastructure or environmental cleanup efforts. Too little of society's resources being used to operate automobiles (A) is not the issue; rather, it is about the negative externalities generated by driving. There is no external benefit to society from operating automobiles (C), as the pollution generated by cars harms society as a whole. Granting a specific subsidy to drivers (D) would exacerbate the problem by encouraging more driving and therefore more emissions.

Automobile Emissions Generate Pollution,have Health Costs for Pedestrians,and Cause Discomfort