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A truck driver was fined ₹10,000 because his vehicle was emitting heavy black soot. The economic rationale for the penalty, per the chapter, is best described as
AA pure revenue-raising tool with no environmental purpose
BInternalising the negative externality the soot imposes on public air quality and health
CA tax on private property rights unrelated to pollution
DAn income transfer from drivers to public-transport users
Answer & Solution
Correct answer: B. Internalising the negative externality the soot imposes on public air quality and health
The black soot is a negative externality — its health and air-quality costs are borne by society at large. The challan internalises that cost on the polluter (the polluter-pays principle), aligning private incentives with the social cost of pollution.
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