The price of gasoline in Europe is much higher than in the United States, and the reason is that the gas tax is much higher in Europe than in the United States.
a. What type of externalities arise from driving automobiles fueled by gasoline?
b. Given what you have learned about externalities and taxation, what is the case for increasing the gas tax in the United States to the European level?
c. Given what you have learned about externalities and taxation, what is the case against increasing the gas tax in the United States to the European level?
d. What is your view on whether the United States should raise the gas tax to the European level and why?