If people took external costs like pollution into consideration:
A) they would consume less of the goods causing these externalities.
B) they would act in a way that is optimal from a societal perspective
C) the markets for these goods creating such externalities would generate greater surplus.
D) All of these statements are true.

Question

Quizplus · Accepted Answer

If people took external costs like pollution into consideration, they would consume less of the goods causing these externalities which is better for the environment and public health. They would also act in a way that is optimal from a societal perspective by considering the full costs and benefits of their actions. This would lead to a more efficient allocation of resources and a reduction in negative externalities. Additionally, the markets for these goods creating such externalities would generate greater surplus as the negative externalities are reduced, making it more attractive for consumers to purchase these goods.

If People Took External Costs Like Pollution into Consideration