Why is a solution to climate change unlikely to stem from private bargaining between the polluters and the victims? Refer to each of the four types of transactions costs discussed in Chapter 8 to answer the question
What will be an ideal response?
All of the transactions costs, the search costs, the collectivization costs, the negotiation costs, and the monitoring and enforcement costs, would be extremely high, which would make finding a solution to climate change through private bargaining highly unlikely. With the high transactions costs, government involvement in finding a solution seems much more likely.
You might also like to view...
If consumers save the entire amount of the increase in their disposable income due to a tax cut, the ________
A) tax cut will lead to a decrease in GDP B) tax cut will lead to an increase in GDP C) tax cut will lead to an increase in current account deficit D) tax cut will have no effect on GDP
Consider the economy of Burgerland, which only produces hamburgers. If the velocity of money is 25, the price of a hamburger is $5, and the quantity of money in the economy is $500, how many hamburgers did Burgerland produce?
a. 2,000 b. 2,500 c. 2,750 d. 3,000
If the capital stock decreases, then the economy will produce ____ output with the ____ amount of labor.
A. same, same B. less, same C. more, same D. more, decreased
The prosperity phase of the business cycle is _____ followed by the recession phase.
A. always B. usually C. sometimes D. never