Which of the following is the government most likely to discourage because of the existence of externalities?

Question

Quizplus · Accepted Answer

The government is most likely to discourage goods or activities that create negative externalities, such as cars that emit excessive exhaust fumes. This is because the pollution from these cars affects not only the drivers and passengers but also the environment and other individuals who may be inhaling the polluted air. A and C are not necessarily discouraged by the government solely on the basis of externalities.

Which of the Following Is the Government Most Likely to Discourage