Why Can't Private Individuals Always Internalize an Externality Without the Help

question 233

Multiple Choice

Why can't private individuals always internalize an externality without the help of government?

• A)Legal restrictions prevent side payments between individuals.
• B)Transactions costs may be too high.
• C)Side payments between individuals are inefficient.
• D)Side payments between individuals are insufficient.

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Definitions:

Longitudinal Study

Research that follows the same subjects over a long period of time, collecting data at multiple intervals to observe changes or developments.

Monitoring the Future

A long-term study that tracks the behaviors, attitudes, and values of American secondary school students, college students, and young adults.

Research Design

The overall strategy that a researcher chooses to integrate the different components of the study in a coherent and logical way, thereby ensuring effective address of the research problem.

Positive Correlation

A relationship between two variables in which both variables move in the same direction, meaning that as one variable increases, the other one also increases, or as one decreases, the other does as well.