Asked by Garrett Jones on Apr 24, 2024

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Automobile emissions generate pollution,have health costs for pedestrians,and cause discomfort to residents of a city.In this case:

A) too little of society's resources are being used to operate automobiles.
B) the externality can be internalized by imposing a specific tax on drivers.
C) there is an external benefit to society from operating automobiles.
D) the externality can be internalized by granting a specific subsidy to drivers.

Automobile Emissions

The pollutants released into the atmosphere by motor vehicles, including carbon monoxide, nitrogen oxides, and hydrocarbons.

Specific Tax

A fixed amount imposed by the government on a product, per unit of quantity.

External Benefit

A benefit that affects a party who did not choose to incur that benefit, typically referring to positive side effects of a transaction or activity on third parties.

  • Learn the approaches by which government actions can secure the optimal diminishment of pollution in a budget-friendly fashion.
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ZK
Zybrea KnightMay 02, 2024
Final Answer :
B
Explanation :
The negative externality of automobile emissions can be internalized through the imposition of a specific tax on drivers. This tax will incentivize drivers to drive less or switch to alternative modes of transportation, which will reduce pollution and health costs for pedestrians while also minimizing discomfort for city residents. It will also generate revenue that can be used for public transportation infrastructure or environmental cleanup efforts. Too little of society's resources being used to operate automobiles (A) is not the issue; rather, it is about the negative externalities generated by driving. There is no external benefit to society from operating automobiles (C), as the pollution generated by cars harms society as a whole. Granting a specific subsidy to drivers (D) would exacerbate the problem by encouraging more driving and therefore more emissions.