Effluent taxes are the most common approach used to control pollutants in the United States

When positive externalities exist, markets tend to overproduce

a. True b. False Indicate whether the statement is true or false

When negative externalities exist, a voluntary agreement can be negotiated. Which of the following statements is TRUE?

A) Voluntary agreements usually do not work since the owner has no incentive to negotiate. B) Transactions costs must be low relative to the expected benefits of reaching an agreement. C) Voluntary agreements are difficult to negotiate because they usually involve government intervention. D) Voluntary agreements always leave the owner worse off.