If Private Bargaining to Resolve an Externality Is to Result

question 172

Multiple Choice

If private bargaining to resolve an externality is to result in an efficient outcome,

• A) rights must be protected by liability rules.
• B) there must be tradable pollution rights.
• C) there must be direct regulation of externalities.
• D) the initial assignment of rights must be clear to both parties.

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Definitions:

Underground Railroad

A secret network of routes and safe houses used in the 19th century to help enslaved African Americans escape to free states and Canada.

Harriet Tubman

An African American abolitionist, humanitarian, and during the American Civil War, a Union spy, renowned for her role in the Underground Railroad, leading enslaved people to freedom.

Free States

Refers to U.S. states that had abolished slavery before or by the end of the American Civil War.

Enslaved People's Efforts

The various ways in which people held in slavery resisted their condition and sought freedom, including revolts, escapes, and culture preservation.