Voluntary agreements may not be a feasible method to internalize an externality when
A) the dollar value of the externality is large.
B) the externality is negative rather than positive.
C) there are significant transaction costs.
D) there are high taxes on the firms that cause the externalities.
C
You might also like to view...
Suppose nominal interest rates in the U.S. rise from 4.6% to 5% and decline in Britain from 6% to 5.5%, while U.S. consumer inflation remains unchanged at 1.9% and British inflation declines from 4% to 3%. In addition suppose, real growth in the U.S. is
forecasted for next year at 4% and in Britain real growth is forecasted at 5%. Finally, suppose producer price inflation in the U.S. is declining from 2% to 1% while in Britain producer price inflation is rising from 2% to 3.2%. Explain what effect each of these factors would have on the long-term trend exchange rate ( per $) and why?
Jack is thinking of starting a sweater company. Sweaters operate in a perfect competition market, which means Jack will do which of the following?
a. Be unable to enter the sweater industry because only one firm is allowed to sell sweaters b. Face high and expensive restrictions on starting his business c. Face no barriers to enter the industry and start his business d. Need to get permission from the local government and from his potential competitors
The continuation of federal agricultural subsidy programs is based on a desire not to undermine the stability of the farm economy
Indicate whether the statement is true or false
Economists view the “tragedy of the commons” as a problem of:
a. free riding. b. selfishness. c. exclusion. d. property rights.