Which of the following is the best example of a negative externality and the appropriate plan for eliminating it?
A.
Air pollution from a factory blows downwind and harms children in a small community. Tax the citizens of the community.
B.
Your neighbor plants a fragrant blooming cherry tree in her front yard. Give a tree subsidy to your neighbor.
C.
The waste from a hog farm pollutes a neighbor's drinking water. Give a subsidy to the hog farmer.
D.
Diesel-burning cars, trucks, and buses are creating smog in your city. Eliminate a subsidy for people who purchase electric vehicles.
E.
Air pollution from a power plant is blowing downwind and harming the trees in your community. Tax the production of electricity.
Exam No： AP Micro Practice Test 4 Year：2024 Question No：56
Answer:
E
Knowledge points:
2.8 The Effects of Government intervention in Markets
6.2 Externalities
6.4 The Effects of Government Intervention in Different Market Structures
Solution:
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