In London, Any Motorist Entering a Particular Area in the City

Multiple Choice

In London, any motorist entering a particular area in the city center during certain specified times must pay a congestion fee equal to £8, with fines for noncompliance rising to as high as £120.The congestion fee is:

A) an example of a Pigouvian tax aimed at regulating the use of the common resource of city streets.
B) an attempt to internalize the costs due to traffic delays and congestion that are created by drivers in the specified area.
C) the wrong policy tool for solving the problem of congestion; instead, motorists should be allowed to make deals to determine when and where individuals are permitted to drive.
D) an example of a Pigouvian tax aimed at regulating the use of the common resource of city streets and an attempt to internalize the costs due to traffic delays and congestion that are created by drivers in the specified area.