When CSU sophomore Cody Clow and his housemates chose not to heed the city's ordinance against unreasonable noise and host a loud party at their off-campus residence last fall, they were confronted and ticketed by police. Fort Collins city code describes unreasonable noise as any sound that will "unreasonably interfere with the enjoyment of life or property." The method the local government used cope with the externality most closely resembles a
A) tax.
B) voucher.
C) subsidy.
D) cap-and-trade policy.

Question

Quizplus · Accepted Answer

The local government imposed a penalty (ticket) on the students for creating unreasonable noise, which is similar to a tax on negative externalities to discourage such behavior.

When CSU Sophomore Cody Clow and His Housemates Chose Not