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Private solutions to the problem of externalities are most likely when

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Private solutions to the problem of externalities are most likely when

Question 1.

The costs in time and other resources that parties incur in the process of facilitating an exchange of goods and services are called

▸

explicit costs.

▸

implicit costs.

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enforcement costs.

▸

transactions costs.

Question 2.

Private solutions to the problem of externalities are most likely when

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government actively encourages these solutions.

▸

transactions costs are low and the monetary damages to third parties are high.

▸

transactions costs are low and the number of bargaining parties is small.

▸

transactions costs are low and the number of bargaining parties is large.

Textbook

InMicro

Edition: 1^st

Authors: Hubbard, O'Brien

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