Graph 10-5
-Refer to Graph 10-5.A policy that restricts the use of a mobile phone while driving an automobile would best be applied to a market characterised by:
A)panel (a)
B)panel (b)
C)panel (c)
D)panel (d)

Question

Graph 10-5 
-Refer to Graph 10-5.A policy that restricts the use of a mobile phone while driving an automobile would best be applied to a market characterised by:
A)panel (a) 
B)panel (b) 
C)panel (c) 
D)panel (d)

Quizplus · Accepted Answer

Panel (a) shows a market with a negative externality, where the use of mobile phones while driving creates a cost to society that is not borne by the individual using the phone. A policy that restricts the use of mobile phones while driving would internalize this externality, making the individual using the phone bear the full cost of their actions.

Graph 10-5 -Refer to Graph 10-5.A Policy That Restricts the Use of the Use