Suppose that a vehicle is invented such that it emits no pollutants into the atmosphere. To achieve an efficient market outcome, the government must:
A. allow other vehicles that emit pollutants into the atmosphere, as long as vehicle owners pay all the costs associated with their pollution.
B. outlaw SUV and other vehicles that pollute the environment.
C. be the sole producer of that vehicle.
D. require all auto makers to produce the vehicles that produces zero emissions.
Answer:A
Suppose that a vehicle is invented such that it emits no pollutants into the atmosphere. To achieve an efficient market outcome, the government must:
A. allow other vehicles that emit pollutants into the atmosphere, as long as vehicle owners pay all the costs associated with their pollution. B. outlaw SUV and other vehicles that pollute the environment. C. be the sole producer of that vehicle. D. require all auto makers to produce the vehicles that produces zero emissions.