One of the reasons that pollution problems are as large as they are is that
A)markets let individuals and firms deplete valuable resources without charging money for doing so.
B)markets are incapable of incorporating valuable resources such as air and pure water.
C)governments use resources without paying for them the way that individuals and firms must.
D)markets are not an efficient means to address scarcity.

Question

Quizplus · Accepted Answer

Markets often do not charge individuals and firms for the use of resources such as air and water, leading to a tragedy of the commons situation where these resources are overused and polluted. This is a well-established economic concept known as externalities. Governments can try to address this through regulations and taxes, but there is often resistance from those who benefit from polluting without paying for the costs. Markets are still an efficient means of allocating resources, but they need to be structured in a way that internalizes these externalities.

One of the Reasons That Pollution Problems Are as Large