Orchards provide services to beekeepers because the bees use the pollen to make honey. This is an example of
A) a positive externality, and too many orchards exist in society.
B) a positive externality, and too few orchards exist in society.
C) a negative externality, and too many orchards exist in society.
D) a negative externality, and too few orchards exist in society.
Answer: B
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Pollution is an example of a
A) negative externality B) positive externality. C) private cost. D) public good.
Suppose that your roommate is very untidy. Suppose she/he gets a $100 benefit from being messy but imposes a $200 cost on you. (Assume that there are no regulations against untidiness in your living quarters.) The Coase Theorem would suggest that an efficient solution can be reached where: a. you pay your roommate at least $100 but no more than $200 to clean up after her/himself b. you pay your
roommate at least $201 to clean up after her/himself. c. you continue to live with your untidy roommate until you are able to make other living arrangements elsewhere. d. your roommate pays you at least $100 to have you clean up after her/him.