Drivers have to pay a toll to drive on certain roads. In essence, a toll is a corrective tax on the externality of __________.

Corrective Tax

A tax designed to induce private decision makers to take into account the social costs that arise from a negative externality.

Externality

A side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in market prices.

Comprehend the function of government in tackling challenges associated with common resources and public goods.

Verified Answer

Final Answer :

congestion

Learning Objectives

Comprehend the function of government in tackling challenges associated with common resources and public goods.