Question

Which of the following is not an attempt to remedy and externality?

a. Price controls to combat the effects of the cost disease.

b. A tax per ton of sulfur dioxide pollution.

c. Government quotas for individual fisherman to limit harvesting of wild salmon.

d. Home association codes requiring home owners to maintain front yards.

Answer 1

As we know that, an externality is a cost or benefit caused by a producer that is not financially incurred or received by that producer.An externality can be both positive or negative and can stem from either the production or consumption of a good or service. The costs and benefits can be both private—to an individual or an organization—or social, meaning it can affect society as a whole.

The correct option is (d).

Home association codes requiring home owners to maintain front yards.

The a,b and c are the possible remedy to externality.

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