7. Externalities
Private Solutions to Externalities: The Coase Theorem
7. Externalities
Private Solutions to Externalities: The Coase Theorem - Online Tutor, Practice Problems & Exam Prep
1
Problem
ProblemA key element of the Coase theorem is:
A
The ability to negotiate at a minimal cost
B
That externalities occur in the production and consumption of all products
C
That there are no efficient solutions to the problems caused by externalities
D
None of the above
2
Problem
ProblemWhich of the following is not a way of dealing with externalities?
A
Internalization
B
Raising taxes
C
Increasing competition
D
Creating an additional market
3
Problem
ProblemIf the assumptions of the Coase theorem are satisfied, then
A
The externality problem is resolved
B
The assignment of property rights does not matter for efficiency.
C
There are no coordination and motivation problems.
D
There is no role for the government.
4
Problem
ProblemIt is possible to remedy a positive externality by:
A
Introducing a tax
B
Introducing a subsidy
C
Doing nothing because it is good to have positive externalities
D
None of the above