If a corrective tax on gasoline results in the efficient output of gasoline by internalizing the negative externalities associated with pollution,then
A) pollution from gasoline will increase.
B) there will be no effect on pollution from gasoline.
C) pollution from gasoline will be zero.
D) pollution from gasoline will decrease.
E) pollution from gasoline will either increase or remain the same.

Question

Quizplus · Accepted Answer

The purpose of a corrective tax on gasoline is to reduce gasoline consumption and encourage more efficient use of gasoline. Therefore, this tax will reduce demand for gasoline, reducing the negative externalities associated with gasoline production and consumption, including pollution. This will lead to a decrease in pollution from gasoline.

If a Corrective Tax on Gasoline Results in the Efficient