Which of the Following Statements Is True

question 55

Multiple Choice

Which of the following statements is true?

• A)The lower transaction costs are, the more likely individuals will solve negative externality problems through a voluntary exchange.
• B)The higher transaction costs are, the more likely individuals will solve negative externality problems through a voluntary exchange.
• C)Coase agrees with Pigou that taxing those activities associated with negative externalities is a good idea.
• D)a and c
• E)none of the above

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Definitions:

Corruption

The abuse of entrusted power for private gain, often undermining the integrity of institutions and causing harm to society.

Underground Prison Economy

A clandestine system of trade and services operated by inmates within a correctional facility.

Illicit Profits

Gains derived unlawfully from criminal activities or unethical business practices.

Prison Officers

Corrections personnel responsible for the supervision, safety, and security of prisoners in a prison, jail, or similar form of detention facility.