Public Regulation Is Often an Effective Means of Dealing with an Externality

question 98

Multiple Choice

Public regulation is often an effective means of dealing with an externality when

• A)property rights are not well- defined
• B)transaction costs of private contracts are high
• C)private contracts are not Pareto optimal
• D)Government officials have superior knowledge

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Definitions:

Microwave Ovens

Electrical appliances used for heating and cooking food through the use of microwave radiation.

Total Variable Costs

The sum of all costs that vary with output level in the production of goods or services.

Drones

Unmanned aerial vehicles (UAVs) controlled by remote or onboard computers, used for a variety of purposes, including surveillance, delivery, and filming.

Total Variable Costs

The sum of all costs that vary with the level of production, such as materials and labor costs.