Government intervention is sometimes used to reduce the external costs of production.
Answer the following statement true (T) or false (F)
True
Externalities will not be corrected purely by the market; some intervention of government is necessary to correct them.
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Suppose the principal offers to share a percentage of the profit with the agent. Such a contract
A) will yield the same income for the agent as a hire contract would. B) is incentive compatible. C) creates a production inefficiency. D) would not be acceptable to any agent.
Which of the following statements is true?
a. Productivity is calculated as hours worked divided by output produced. b. Americans have a higher standard of living than Indonesians because American workers are more productive than Indonesian workers. c. Both A and B are correct. d. None of the above are correct.