If people took external costs like pollution into consideration,they would on net:
A) consume a socially non-optimal amount of the goods causing the externalities.
B) not change their behavior to consume more or less of the goods causing externalities.
C) consume more of the goods causing these externalities.
D) consume less of the goods causing these externalities.

Question

Quizplus · Accepted Answer

If people took external costs like pollution into consideration, they would consume less of the goods causing these externalities. This is because the true cost of producing and consuming these goods is higher than the price that consumers are currently paying, due to the external costs like pollution. When consumers have to pay the full cost of a good, they are likely to consume less of it.

If People Took External Costs Like Pollution into Consideration,they Would