Explain ways in which the government can remedy an externality
What will be an ideal response?
If bargaining breaks down and an efficient outcome cannot be found through voluntary negotiations, the government may need to take action to eliminate market failures and externalities. One type of government intervention is emissions standards. Emissions standards are legal limits on the amount of pollution that a person or company can produce when engaged in a particular activity. Other policies include those that force people to internalize external costs and benefits. This can be achieved through taxes or fees, subsidies and exposure to legal liabilities for the harms of particular choices.
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The analysis is externally valid if
A) the statistical inferences about causal effects are valid for the population being studied. B) the study has passed a double blind refereeing process for a journal. C) its inferences and conclusions can be generalized from the population and setting studied to other populations and settings. D) some committee outside the author's department has validated the findings.
Economic contractions during the period from 1950 to 2007
A. were more frequent than prior contractions. B. were shorter than prior contractions. C. produced larger increases in unemployment than did prior contractions. D. were deeper (in terms of Real GDP) than prior contractions.
If the government taxes a coal company by an amount equal to the damages of each marginal ton of coal, then the coal company's marginal social cost curve is the same as the marginal ________ curve.
A. private cost B. benefit C. cost D. damage cost
Human capital shortages are not a barrier to economic growth in developing countries.
Answer the following statement true (T) or false (F)