To produce honey, beekeepers place hives of bees in the fields of farmers. As bees gather nectar, they pollinate the crops in the fields, which increases the yields of these fields at no additional cost to the farmer. What might be a reasonable private solution to this externality, and how might the solution be reached?
One solution would be to have one person own both the farm fields and the beehives, in which case the externality is internalized. Another solution would be to have the farmer and beekeeper enter into a contract so that they can coordinate the number of bee hives and acres of crops to maintain an efficient outcome.
You might also like to view...
Use the following list of factors that are related to the aggregate demand curve to answer the next question.1) Real-Balances Effect2) Household Expectations3) Interest-Rate Effect4) Personal Income Tax Rates5) Profit Expectations6) National Income Abroad7) Government Spending8) Foreign Purchases Effect9) Exchange Rates10) Degree of Excess CapacityWhich of the above factors best explain the downward slope of aggregate demand curve?
A. 7, 9, and 10 B. 4, 6, and 7 C. 2, 4, and 6 D. 1, 3, and 8
Suppose there are 7 firms in the candy industry with the market shares shown above. What is the HHI for the industry?
A) 1850 B) 2000 C) 6400 D) 100 E) 20
One of the arguments supporting new classical theory is the policy ineffectiveness proposition (PIP)
Indicate whether the statement is true or false
In monopolistic competition, there is:
A. productive efficiency only. B. both allocative and productive efficiency. C. neither allocative nor productive efficiency. D. allocative efficiency only.