(Consider This) According to the Coase Theorem

question 150

Multiple Choice

(Consider This) According to the Coase theorem,

• A) government should levy excise taxes on firms that generate spillover or external costs.
• B) taxes should be levied such that they change private behavior as little as possible.
• C) private individuals can often negotiate their own resolution of externality problems, without the need for government intervention.
• D) private firms should not provide public goods.

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Definitions:

Constructive

Serving a useful purpose; tending to build up, improve, or promote positive development.

Enhancing

Enhancing involves improving or augmenting the quality, value, or extent of something.

Transitional

Pertaining to or involving a phase of change from one state, condition, or stage to another, often implying a process of adaptation or evolution.

Winnicott

Refers to Donald Winnicott, a British psychoanalyst known for his work on developmental psychology and object relations theory.