In order to achieve a socially optimal level of output,activities that generate negative externalities should be: A) banned. B) subsidized. C) taxed. D) bought out by the government.
A village has five residents,each of whom has accumulated savings of $50.Each villager can use the money to buy a government bond that pays 10% interest per year or to buy a year-old goat,send it onto the commons to graze,and sell it after one year.The price of the goat that the villager will get at the end of the year depends on the amount of weight it gains while grazing on the commons,which in turn depends on the number of goats sent onto the commons,as shown in table below. Refer to the information given above.Left to private incentives,the villagers earn _____ than when goat grazing is determined collectively. A) less total income B) more total income C) the same amount of total income D) either more or less total income depending on the market price of goats
In order to achieve a socially optimal level of output,production that generates positive externalities should be: A) required. B) subsidized. C) conducted by the government. D) deregulated.
Lunch in Jamie's dorm is an all-you-can-eat buffet,served from 11 a.m.until 1 p.m.By noon,the buffet is picked over,and by 12:30,there are very few popular items left.The garbage bins,though,are full of food. Refer to the information given above.The buffet in Jamie's dorm is an example of: A) a Coase-like solution to externalities. B) a tragedy of the commons. C) excess supply in the market. D) a good with positive externalities.