An additional electric automobile on a congested freeway creates:
A) no production or consumption externality because electric cars do not pollute
B) a positive production externality because electric cars reduce pollution
C) a positive consumption externality because existing cars will increase their speed after the car enters the freeway
D) a negative consumption externality because its presence reduces the speed of traffic for cars already on the freeway

Question

Quizplus · Accepted Answer

The presence of an additional electric car on a congested freeway leads to a negative consumption externality because it reduces the speed of traffic for cars already on the freeway. This is because the total number of vehicles on the road has increased, leading to more congestion and slower speeds for all cars. While electric cars do not produce pollution, their presence still affects the flow of traffic and can create negative externalities for other drivers.

An Additional Electric Automobile on a Congested Freeway Creates