When externalities cause markets to be inefficient (x) government action is sometimes needed to solve the problem. (y) private solutions can be developed to solve the problem. (z) there is a way to eliminate the problem of externalities in the market if producers are provided with the appropriate incentives to internalize the externality. Select one or more: a. (x), (y) and (z) b. (x) and (y) only c. (x) and (z) only d. (y) and (z) only e. (z) only
When externalities cause markets to be inefficient (x) government action is sometimes needed to solve the problem. (y) private solutions can be developed to solve the problem. (z) there is a way to eliminate the problem of externalities in the market if producers are provided with the appropriate incentives to internalize the externality. Select one or more: a. (x), (y) and (z) b. (x) and (y) only c. (x) and (z) only d. (y) and (z) only e. (z) only
Chapter17: Market Failure: Externalities, Public Goods, And Asymmetric Information
Section: Chapter Questions
Problem 12QP
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When externalities cause markets to be inefficient
(x) government action is sometimes needed to solve the problem.
(y) private solutions can be developed to solve the problem.
(z) there is a way to eliminate the problem of externalities in the market if producers are provided with the appropriate incentives to internalize the externality.
Select one or more:
a. (x), (y) and (z)
b. (x) and (y) only
c. (x) and (z) only
d. (y) and (z) only
e. (z) only
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