Sometimes the Government Deals with Externalities by Creating Laws to Regulate

Sometimes the government deals with externalities by creating laws to regulate behavior instead of using taxes to correct the market failure. So, requiring auto manufacturers to install a device called a catalytic converter which removes some toxins from exhaust may be preferable to a gas tax that reduces driving levels. This route is often preferred because:

A) the cost of the externality is unknown.
B) it requires less technological development.
C) it more heavily penalizes drivers who consume more gas than those who consume less.
D) only car drivers pay for the externality.

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