When a Particular Negative Externality Affects a Very Large Number

question 171

Multiple Choice

When a particular negative externality affects a very large number of people, it is likely that

• A)government will not find it worthwhile to impose a corrective tax.
• B)private solutions to the problem will dominate any attempt by government to alleviate the problem.
• C)the solution to externalities suggested by the Coase theorem will work very well.
• D)the solution to externalities suggested by the Coase theorem will not work.

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Definitions:

Social Regulation

Social regulation involves government actions aimed at improving health, safety, and the environment, often impacting how businesses operate.

Criticisms

Criticisms are expressions of disapproval based on perceived mistakes or faults in ideas, actions, or outputs.

Regulation

The establishment of rules by government or regulatory bodies intended to influence economic activity and protect consumers and investors.

Social Regulation

Government-imposed regulations aimed at improving society's conditions, such as health, safety, and environmental protection.