Category: Externality & Internality

Roberto and Thomas live in a university hall of residence Roberto values playing loud music at a value of €100. Thomas values Pease and quiet at a value of €150. Which of the following statements is true ?

A. It is efficient for Roberto to stop playing loud music regardless of who has the property right to the level of sound
B. it is efficient for Roberto to continue to play loud music
C. It is efficient for Roberto to stop playing loud music only if Thomas has the property right to peace and quiet
D. It is efficient for Roberto to stop playing loud music only if Roberto has the property right to play loud music

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

The government engages in a technology policy ?

A. by allocating tradable technology permits to high technology industry.
B. to internalize the positive externality associated with technology-enhancing industries.
C. to help stimulate private solution to the technology externality
D. to internalize the negative externality associated with industrial pollution