Roberto and Thomas live in a university hall of residence. Reberto values playing loud music at a value of €100. Thomas values peace and quiet at a value of €150. Which of the following statements is true about an efficient solution to this externality problem if Roberto has the right to play loud music and if there are no transaction costs ?

Related Mcqs:

An externality is ?

A. the benefit that accrues to the buyer in a market B. the cost that accrues to the seller in a market C. none of these answers D. the compensation paid to a firm’s external consultants. E. The uncompensated impact of one person’s actions on the well-being of a bystander...

A positive externality generates ?

A. a social cost curve that is above the supply curve (private cost curve) for a good B. none of these answers C. a social value curve that is above the demand curve (private value curve) for good D. a social value curve that is below the demand curve (private value curve) for a good...

When wealthy alumni provide charitable contributions to their universities to reduce the tuition payments of current students it is an example of ?

A. an attempt to internalize a positive externality B. an attempt to internalize a negative externality C. a Pigouvian tax D. a command-and-control policy...

Suppose an industry emits a negative externality such a pollution and the possible methods to internalize the externality are command-and-control policies, pigovian taxes, and tradable pollution permits. If economists were to rank these methods for internalizing a negative externality based on efficiency ease of implementation and the incentive for the industry to further reduce pollution in the future, they would probably rank them in the following order (from most favored to least favored) ?

A. Pigouvian taxes, command-and-control policies, tradable pollution permits. B. tradable pollution permits, Pigouvian taxes, command-and-control policies C. tradable pollution permits command-and-control policies, Pigovian taxes. D. command-and-control policies, tradable pollution permits, Pigovian taxes. E. They would all rank equally high because the same result can be obtained from any one of the policies...

A negative externality generates ?

A. a social cost curve that is below the supply curve (private cost curve) for a good B. none of these answers C. a social cost curve that is below the supply curve (private cost curve) for a good D. a social value curve that is above the demand curve (private value curve) for a … A negative externality generates ?Read More...