"Since the Wind and the Flowing Rivers Can Take Away

question 260

Multiple Choice

"Since the wind and the flowing rivers can take away industrial waste without charge, polluting is a profitable activity even when people are seriously harmed downwind or downstream, unless environmental regulators stop it." This statement is

• A) false if the property rights of downwind or downstream individuals are protected.
• B) true if the property rights of industrialists are enforced.
• C) never true.
• D) always true.

Understand the concept of technology spillovers and their implication for government policy.

Analyze the effects of public goods and positive externalities on market outcomes.

Understand the concept of pollution permits and their role in controlling pollution levels.

Recognize the difference between equilibrium quantity and socially optimal quantity in the presence of externalities.

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Definitions:

Earmarks

Narrow, specially designated spending authorizations placed in broad legislation by senators and representatives for the purpose of providing benefits to firms and organizations within their constituencies. Earmarked projects are exempt from competitive bidding and normal evaluation procedures.

Authorized Expenditures

Expenditures that are officially approved or sanctioned by an authoritative body or individual, often within an organizational or governmental context.

Narrow Specifically

Focusing or specializing in a very specific or narrow area or topic.

Earmarks

Provisions within legislation that allocate funds for specific projects, often without proper review or competition.