Which of the following conditions is necessary in order for the private market to efficiently solve an externality problem?
a. The person who creates the externality must have the legal right to do so.
b. The person harmed by the externality must have a legal right to be compensated.
c. The value of any side payment must be smaller than the marginal cost of producing the externality.
d. The value of any side payment must be smaller than the marginal cost of creating the externality.
e. Side payments must be arranged without cost.
E
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In U.S. presidential elections, the winner of the popular vote
A) was always the election winner. B) lost the election only one time in history. C) lost the election about 10 percent of the time. D) lost the election more times than he won the election.
Suppose the price of a DVD rose from $15 to $17 and the quantity demanded decreased from 1,000 per month to 900 per month. Using the midpoint formula, the ________ percent change in price led to a ________ percent change in the quantity demanded
A) 12.5; 10.5 B) 13.3; 10.0 C) 11.8; 11.1 D) 8.0; 9.5 E) None of the above answers is correct.
Changing the rate at which the central bank makes loans counts as:
A) fiscal policy. B) monetary policy. C) neither fiscal nor monetary policy. D) both fiscal and monetary policy.
Refer to the table above. In autarky the relative price of X (in terms of Y) in A would be
A) 3/4. B) 4/3. C) 3/9. D) $3.