In Summarizing the Research on the Externalities Associated with Driving

question 266

Multiple Choice

In summarizing the research on the externalities associated with driving cars,a 2007 Journal of Economic Literature article concluded that the optimal corrective tax on gasoline in the United States would be

• A) $0.40 per gallon.
• B) $0.90 per gallon.
• C) $2.10 per gallon.
• D) $3.30 per gallon.

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Definitions:

Final Goods

Products that are completed and ready for sale and consumption, as opposed to intermediate goods used in the production of another product.

Consumer Price Index

An index measuring the change in the price level of a basket of consumer goods and services purchased by households.

Market Basket

A selected set of goods and services used to track changes in prices and measure inflation over time.

Widely Used

A term denoting something that is utilized by a large number of people or entities across various contexts.