A Familiar Example of a Negative Externality Is Traffic Congestion

question 104

Multiple Choice

A familiar example of a negative externality is traffic congestion.In principle,it should be possible to internalize this externality by permitting drivers to negotiate rights to drive during particular times.The most likely reason that these negotiations do NOT happen is that:

• A)most individuals are unfamiliar with the Coase theorem.
• B)the transaction costs associated with identifying and establishing communication among the many interested parties would be prohibitive.
• C)agreements arising from such negotiations could not be enforced since the Constitution guarantees all individuals freedom of access to all public roads.
• D)lawyers would find a way to prohibit such negotiations unless they were actively involved,thus making transaction costs prohibitive.

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Definitions:

Crisis Intervention

Short-term assistance provided to individuals experiencing an immediate and acute psychological crisis to stabilize their condition.

Civil Commitment

A legal process by which an individual can be forced to undergo mental health treatment.

Suicide Prevention Programs

Initiatives designed to reduce the incidence of suicide through outreach, education, and intervention.

Clinically Depressed

A medical condition characterized by persistent sadness, lack of interest or pleasure in activities, and other symptoms impairing daily function.