Extemal'rties. Public Goods & Taxation 2. Why are tradeaple pollution perm its considered to be a more efcient way to reduce pollution than Govemment regulation? ( 2 marks) 3. Explain the fundamental reason that common resources have a tendency to be exploited in private markets. (2 marks) 4. Australia has a higher tax on luxury cars compared to other cars. Is this an effective way to raise revenue for the government from the rich'? (2 marks)