According to the textbook, which of the following methods for coordinating the supplies and demands for scarce goods tends to work best to enhance the freedom and power of people who want the goods?

Which of the following must be present to reach a negotiated solution to an externality problem?

A) A majority of the parties involved must agree to a solution. B) A large number of people must be involved to justify negotiating a solution. C) The government must approve the solution. D) The transactions costs to negotiate the solution must be relatively low.

When considering changes in tax policy, economists usually focus on

A) people's ability to pay taxes. B) the marginal tax rate. C) the average tax rate. D) people's willingness to pay taxes.