When do externalities require government intervention? When issuch intervention unlikely to be necessary?
A. Government intervention is only necessary when theexternality has a negative impact. Tradeable emissions permits aretypically the most effective way to resolve an externality.
B. Intervention is unlikely to be necessary when property rightsare well specified and the externality affects relatively fewparties; bargaining can usually resolve the externality.
C. Intervention is unlikely to be necessary when property rightsare well specified and the externality affects a large number ofpeople; a class action lawsuit can usually resolve theexternality.
D. Government intervention is only necessary when theexternality has a negative impact. Imposing a fee is typically themost effective way to resolve a negative externality.
When do externalities require government intervention? When is such intervention unlikely to be necessary? A. Governme
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