Which of the following is a TRUE statement?
A) Externalities cannot be solved by market solutions and always require government action.
B) Externalities would never be a problem if people were willing to comply with government regulations.
C) Voluntary agreements can solve externality situations by making the party incurring the costs bear the costs of his or her actions.
D) Externalities can only be handled by government regulation and emission taxes cannot work effectively.
Answer: C
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How do consumers benefit from trade among monopolistically competitive firms?
a. Prices are the same as in autarky, but the wider choice of goods increases consumer surplus. b. Consumer surplus increases because prices are lower than in autarky, and there is a wider choice of goods. c. Prices are higher than in autarky, but the wider choice of goods increases consumer surplus. d. The government provides cash subsidies to consumers
The above table gives the government outlays and tax revenues from 2008 through 2012 for two countries. In 2011 country A had a ________ and country B had a ________
A) budget deficit; budget deficit B) balanced budget; budget surplus C) balanced budget; budget deficit D) budget surplus; budget surplus E) budget surplus; balanced budget