Government Intervention Will Not Be Necessary When Voluntary Contracting Internalizes

question 276

Multiple Choice

Government intervention will not be necessary when voluntary contracting internalizes an externality. Which of the following is NOT a necessary condition for this to occur?

• A) Well-defined private property rights
• B) Low transaction costs
• C) Large numbers of individuals involved in the transactions
• D) Low contract enforcement costs

---

Definitions:

Court-Annexed Arbitration

A form of arbitration overseen by a court, often used to streamline legal disputes by using a neutral third party.

Neutral Third Party

An unbiased individual or entity involved in a negotiation or conflict resolution who does not favor any of the disputants.

Regular Trial

A formal judicial proceeding where a case is heard and decided, usually in front of a judge and possibly a jury.

Supreme Court

The highest judicial court in a country or state, often having the final say in legal matters and interpretations of the law.