Government invention is required to solve externality problems if ________
A) transaction costs associated with private negotiations are low
B) the number of people affected by the externality is small
C) the number of people affected by the externality is large
D) property rights are clearly defined
C
You might also like to view...
Which of the following statements is FALSE?
A) The rationing function of prices is not allowed to freely operate when the government imposes price controls. B) Price controls may take the form of price ceilings or price floors. C) Price ceilings below the equilibrium price can cause black markets to develop. D) Rent controls are examples of price floors.
In Figure 42.1, what is the quantity an unregulated monopolist will produce (assuming the regulator strives for zero economic profit)? 
Figure 42.1
A. Q1 B. Q2 C. Less than Q1 D. More than Q2
Which of the following correctly orders, highest to lowest, the relative magnitudes of U.S. spending by businesses on components of R&D?
A. Invention, basic research, innovation. B. Invention, innovation, basic research. C. Innovation, invention, basic research. D. Basic research, invention, innovation.
Suppose a plaintiff hires a lawyer to represent her in a court case. The lawyer will receive a share of the settlement if the plaintiff wins. Under this contract,
A) production efficiency cannot be achieved. B) the client bears all of the risk. C) the lawyer bears all of the risk. D) the risk is shared.