If You Wish to Assign Property Rights So That a Previously

question 11

Multiple Choice

If you wish to assign property rights so that a previously existing externality is now fully accounted for in a market transaction,you have to solve:

• A) the holdout problem.
• B) the assignment problem.
• C) the free rider problem.
• D) the problem of internalizing the externality.

---

Definitions:

Mixed-Market Economy

An economic system that combines elements of both capitalism and socialism, featuring a combination of free market principles and government intervention.

Laissez-Faire Economy

An economic system where transactions between private parties are free from government intervention such as regulation, privileges, tariffs, and subsidies.

Laissez-Faire Capitalism

An economic system where private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies.

Market System

This system of economy relies on supply and demand to guide decisions about investments, production levels, and the distribution mechanism, with the cost of goods and services being determined in an unregulated pricing system.