One Reason That Private Solutions to Externalities Do Not Always

question 201

Multiple Choice

One reason that private solutions to externalities do not always work is that

• A)government intervention negates the benefits of positive externalities.
• B)some people benefit from externalities.
• C)interested parties incur costs in the bargaining process.
• D)charities are not well organized.

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Definitions:

Irrational Fear

A fear that is disproportionate to the actual danger posed, often a symptom of anxiety disorders.

Mania

A mental state characterized by periods of great excitement, euphoria, delusions, and overactivity.

Obsession

A persistent, involuntary thought, image, or impulse that invades consciousness and causes great distress.

Panic Disorder

A psychiatric disorder characterized by sudden and repeated episodes of intense fear accompanied by physical symptoms that may include chest pain, heart palpitations, shortness of breath, dizziness, or abdominal distress.