Asked by Chynna Hughes on May 08, 2024
Verified
A toll on a congested road is in essence
A) an interstate highway subsidy.
B) a hidden tax.
C) a gasoline tax.
D) a corrective tax.
Corrective Tax
A tax designed to correct market outcomes by accounting for externalities, encouraging more efficient allocation of resources.
- Recognize the significance of implementing corrective taxes and tolls to address the overconsumption of communal resources and alleviate congestion.
Verified Answer
JR
Janiah RigginsMay 15, 2024
Final Answer :
D
Explanation :
A toll on a congested road acts as a corrective tax because it aims to reduce traffic congestion by charging drivers for using the road, thereby correcting the negative externality of congestion.
Learning Objectives
- Recognize the significance of implementing corrective taxes and tolls to address the overconsumption of communal resources and alleviate congestion.