Question
I need to demonstrate how externalities work in real life. Do you think you could help me graph the next passage? To the best of
I need to demonstrate how externalities work in real life.
Do you think you could help me graph the next passage? To the best of your ability (no need for all the data to be included)
The $10 I cost the economy was based on Parry's algorithm, which calculates that drivers should pay a tax of at least $1.25 a gallon. Forty percent of that price, he says, is the cost that each vehicle adds to congestion. Another 40 cents or so offsets the price of accidents if we divided the full cost more than $400 billion annually by each gallon of gas consumed. (Only about 32 cents would be needed to offset the impact on the environment.) According to Parry's logic, if we paid a tax of $1.25 per gallon instead of the current average of 50 cents, the price of gas would increase by about 25 percent to around $4 a gallon, which is still well below what much of Europe pays.
Thank you!
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