When a Particular Negative Externality Affects a Very Large Number

question 171

Multiple Choice

When a particular negative externality affects a very large number of people, it is likely that

• A)government will not find it worthwhile to impose a corrective tax.
• B)private solutions to the problem will dominate any attempt by government to alleviate the problem.
• C)the solution to externalities suggested by the Coase theorem will work very well.
• D)the solution to externalities suggested by the Coase theorem will not work.

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Definitions:

Emotional and Psychological

Pertaining to the feelings, thoughts, and mental processes of an individual.

Group Members

Individuals who belong to a specific group and contribute towards the collective goals and dynamics of the group.

Social Loafing

The tendency for individuals to exert less effort when working in a group than when working alone.

Group Behavior

The actions, interactions, and dynamics of individuals when they are part of a group, influenced by the collective's norms and goals.