A5) The firm "Oil-for-life" drills oil in the Gulf coast. An accident occurs that cause oil spills, thus imposing a negative externality. Assume it is very difficult to determine the true costs from an oil spill. Which of the following statements is true? a) Coasian bargaining can help reduce the externality by assigning property rights to the polluter b) Coasian bargaining can help reduce the externality by assigning property rights to the victim c) Subsidies for safer drilling technologies can reduce the externality and the likelihood of future oil spills d) Tradeable permits can help reduce the externality by compensating the victim e) Coasian bargaining does not apply

A5) The firm "Oil-for-life" drills oil in the Gulf coast. An accident occurs that cause oil spills, thus imposing a negative externality. Assume it is very difficult to determine the true costs from an oil spill. Which of the following statements is true? a) Coasian bargaining can help reduce the externality by assigning property rights to the polluter b) Coasian bargaining can help reduce the externality by assigning property rights to the victim c) Subsidies for safer drilling technologies can reduce the externality and the likelihood of future oil spills d) Tradeable permits can help reduce the externality by compensating the victim e) Coasian bargaining does not apply

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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