When dealing with externalities, how can we correct market failure?
a) In the case of negative externalities, the market can correct it, but in the case of positive externalities, government regulation is necessary.
b) In the case of positive externalities, the market can correct it, but in the case of negative externalities, government regulation is necessary.
c) In the case of both positive and negative externalities, market can correct all market failures.
d) In the case of both positive and negative externalities, government regulation is necessary to induce market participants to internalize the externality.
Ans: d) In the case of both positive and negative externalities, government regulation is necessary to induce market participants to internalize the externality.
You might also like to view...
Another term for an investment good is
a. interest b. savings c. capital d. rent e. production
When measured as a percentage of GDP, the U.S. national debt reached its highest levels as a result of:
a. World War II. b. The Vietnam War. c. The Reagan defense buildup and tax cut. d. The Bush economic recovery program.
The key concept that serves as the basis for the study of economics is:
A. unemployment. B. scarcity. C. opportunity cost. D. money.
How does the Tax Foundation predict tariffs will affect unemployment, income and economic growth?
What will be an ideal response?