If Only a Few People Are Affected by an Externality

question 493

Multiple Choice

If only a few people are affected by an externality, then it is likely that

• A)the government will play a role in collective action.
• B)command-and-control regulation will provide the most efficient solution to the externality.
• C)a private solution to the inefficiency will occur.
• D)a private solution will be very difficult to negotiate.

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Definitions:

Interaction Effect

Occurs when the effect of one independent variable on the dependent variable varies depending on the level of another independent variable.

Factorial ANOVA

A statistical test used to determine if there are any statistically significant differences between the means of three or more independent groups, based on multiple factors.

Main Effect

The direct influence of an independent variable on a dependent variable in an experimental design.

Weight Loss Program

A structured plan involving dietary adjustments, exercise, or other strategies aimed at reducing body weight.