Public goods are both non-rival and nonexclusive. Explain each of these terms and show clearly, giving examples, how they differ from each other.

John loves playing country music at high volume. Mike loves opera but hates country music. Unfortunately, they are next-door neighbors in an apartment building with paper-thin walls. a. What is the negative externality in this situation? b. What command-and-control policy might the landlord impose? c. Could a command-and-control policy cause an inefficient outcome?d. Suppose the landlord lets the tenants do whatever they want. Using the Coase theorem, how might John and Mike reach an efficient outcome on their own?

Externalities are only inefficient when they impose a cost. They are not inefficient when they bestow a benefit. Select one: True False

#10. When traffic gets congested, there are negative externalities. For big cities, this creates inefficiency. Could the Coase Theorem fix this problem? a. Yes, it can. The government could assign property rights: X number of drivers can be on the road during peak hours. Everyone could then negotiate an efficient solution. b. No, because bargaining costs are too high. c. No, because the government doesn't have enough information to solve the problem. d. Both b and c.