If Only a Few People Are Affected by an Externality

question 306

Multiple Choice

If only a few people are affected by an externality, then it is likely that

• A) corrective taxes will provide the most efficient solution to the externality.
• B) command-and-control regulation will provide the most efficient solution to the externality.
• C) a private solution to the inefficiency will occur.
• D) a private solution will be very difficult to negotiate.

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Definitions:

Nonverbal Communication

The process of conveying a message without the use of words, which can include facial expressions, body language, gestures, and visual cues.

Precision

The quality of being exact, accurate, and careful about details.

Self-Disclosure

The act of revealing personal information about oneself to others, which can play a crucial role in developing intimacy and trust in relationships.

Personal Information

Data about an individual that identifies them or can be used to identify them, such as their name, address, and preferences.