In Summarizing the Research on the Externalities Associated with Driving

question 435

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, in 2015 dollars, would be about

• A)$0.50 per gallon.
• B)$0.90 per gallon.
• C)$2.58 per gallon.
• D)$2.78 per gallon.

---

Definitions:

Consumption

Household consumption of products and services.

Investment

The allocation of resources, usually money, in expectation of a future benefit such as profit or interest.

Gross Domestic Product

The total market value of all final goods and services produced within a country in a given period, used as a broad measure of a nation's overall economic activity.

Interstate Highway

A network of controlled-access highways that forms part of the National Highway System in the United States.