If an Externality Is Created by a Single Person or Firm,and

question 71

Multiple Choice

If an externality is created by a single person or firm,and affects only a single person or firm,then

• A)it is referred to as a single externality
• B)the inefficiency caused by that externality may be resolved by those two parties
• C)the externality takes the form of a side payment
• D)Pareto efficiency is guaranteed
• E)fairness dictates that the externality be removed

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Definitions:

Early Neutral Case Evaluation

A process in which parties to a dispute receive an assessment of their case by an impartial expert early in the litigation process.

Dispute Resolution

A process or methods used to resolve conflicts or disputes between parties, including negotiation, mediation, arbitration, or legal proceedings.

Ownership

The legal right or title to an asset or property, granting the owner control and decision-making powers over it.

Arbitration

A form of alternative dispute resolution where a neutral third party hears evidence from the disputants and makes a decision that can be binding.