The government is seen by many economists to be the agency that best resolves the problem of negative externalities because it
a. can create positive externalities that compensate for the negative ones
b. has access to more information than any private firm or individual and can act more objectively than any private firm or individual
c. is the only one affected by negative externalities
d. gains the most from negative externalities
e. has the power to distribute the bonuses resulting from negative externalities
B
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What is the conclusion in the prisoners' dilemma?
A) Firms should not enter a legal duopoly. B) Two prisoners acting in their own best interest harm their joint interest. C) There is no Nash equilibrium available to the prisoners. D) Prisoners do not act interdependently. E) Duopolies almost always reach their best outcome.
What is private information and what problems does it create?
What will be an ideal response?