Which of the following will lead to an efficient private solution if negative externalities are present in a market?
A) The party having the legal right is taxed.
B) The party creating the externality has the legal property right.
C) The party suffering from the externality has the legal property right.
D) The parties involved negotiate with each other and reach an agreement.
D
You might also like to view...
Assume you pay a premium of $0.80/bu for a soybean call option with a strike price of $9.00/bu and that the current futures price is $9.30/bu. What is the option's current intrinsic value?
A. $0.20/bu B. $0.30/bu C. $0.50/bu D. $0.80/bu
In the classical model,
a. markets do not automatically clear. b. business demand for loanable fund exceeds business planned investment spending. c. business demand for loanable fund is equal to business planned investment spending. d. businesses engage in interest-free borrowing. e. the government's demand for funds is downward sloping.