Adjudication reduces problems created by negative externalities by
A) assigning liability to the party most able to pay (the deep pocket).
B) balancing marginal social benefits against marginal social costs.
C) discovering who has what rights.
D) making more accurate private benefit-cost analyses.
E) measuring externalities more precisely.
C
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Implementing a regional free-trade agreement may have an effect in which, due to reduced tariffs, a nation in the agreement begins to import a product it had previously produced itself. This effect is called:
a. trade creation. b. trade diversion. c. reciprocal trade agreements. d. the employment effect of FTAs.
The premium on a college education increases when
(a) the market demand for knowledge and skilled workers decreases, and all else is held constant. (b) the market supply of knowledge and skilled workers increases, and all else is held constant. (c) the growth in the demand for knowledge and skilled workers outpaces the growth in supply. (d) the growth in the supply of knowledge and skilled workers outpaces the growth in demand.