Question

“Tax” has been found as an effect way to reduce greenhouse gas emissions from tourism. The...

“Tax” has been found as an effect way to reduce greenhouse gas emissions from tourism. The reason is because:

a. Tax internalizes the social cost of travel

b. Tax shifts the market supply curve to the left, leading to a reduced quantity

c. Tax shifts the market supply curve to the left, leading to a higher price

d. All of the above

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Answer #1

Option D. All of the above

Explanation: Tourism has negative externaility because of emission. So, a tax helps in producing the socially optimal level of tourism.

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