Government intervention will not be necessary when voluntary contracting internalizes an externality. Which of the following is NOT a necessary condition for this to occur?
A. low transaction costs
B. low contract enforcement costs
C. large numbers of individuals involved in the transactions
D. well-defined private property rights
Answer: C
You might also like to view...
Fearing that the economy was overheating, policymakers instituted a temporary tax surcharge in 1968. This temporary surtax
A) drastically reduced both savings and consumption. B) increased savings and reduced consumption. C) reduced savings but had little effect on consumption. D) successfully reduced consumption sufficiently to cool down the economy.
Alice, Bob, and Cody live in Wesland. Their annual incomes and the amounts they pay in income tax are shown in the table below. Income Tax Alice 30,000 6,000 Bob 50,000 7,500 Cody 100,000 12,000 The income tax in Wesland is
A) proportional. B) regressive. C) flat-rate. D) progressive.
Which of the following are reasons to consider the protective role of the state in an economic framework?
a. The protection of rights is necessary for a functioning economy. b. The protection of rights comprises a large portion of the government spending. c. The protection of rights is necessary for international trade. d. Both a and b. d. Both a and c.
Which of the following market structures is considered imperfectly competitive?
A. Perfect competition B. Monopolistic competition C. Monopoly D. All of these are considered imperfectly competitive.