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Indicate whether the statement is true or false, and justify your answer.
The Coase theorem implies that there are no externalities.
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- Indicate whether the statement is true or false, and justify your answer.In the presence of externalities, private and social welfare diverge.Indicate whether the statement is true or false, and justify your answer.Herd immunity is a negative health externality.Indicate whether the statement is true or false, and justify your answer.Suppose Fred imposes negative externalities on Wilma when he engages in some otherwise productive activity (like yelling “Yabba Dabba Doo!” to encourage himself, for instance). Suppose further that Fred and Wilma know each other well, communicate effectively and trust each other, and generally have low costs from transacting with each other. In this setting, having the government impose a Pigouvian tax on Fred each time he yells “Yabba Dabba Doo!” is the only way to generate socially optimal levels of yelling.
- The proposition that problems of externalities will be resolved efficiently through private exchange is known as Property rights Pollution abatement Coase theorem Tort lawPareto-optimality can theoretically be achieved, even in the presence of negative externalities, by setting a tax at the correct level. is it true or falseWhat conditions are needed for the Coase Theorem to be a viable way to correct externalities?
- Why are taxes, one traditional remedy for negative externalities, less than ideal for smoking cessation in the United States? Nicotine is addictive/demand is inelastic, and smokers are mostly poor, so in effect cigarette taxes reduce the quality of life of people we’re trying to help without substantially reducing smoking Demand is inelastic, and smokers are mostly rich, so they don’t reduce smoking as a result of taxes Demand is elastic, and smokers are mostly old, so taxes reduce smoking but cause increased anxiety among the elderly Demand is elastic, and smokers are mostly young, so they quit smoking but are then more likely to experiment with illegal drugsHow does Coase's theorem solve the problem of externalities without the need for government intervention?The Coase theorem states that interested parties will negotiate to correct externalities if two assumptions are met. What are those two assumptions? No barriers to negotiation. AND All parties agree on the value of the externality. No barriers to negotiation. AND Property rights are well-defined. Property rights are well-defined. AND All parties agree on the value of the externality. All parties agree on the value of the externality. AND Parties have mutual respect for each other.
- True-False-Uncertain. Respond to following statements as True, False, Uncertain and justify your claim. Answers that do not provide justification will receive zero points. a) According to the Coase Theorem, government intervention is needed to solve externalities. b) It always makes sense when a public good is financed by the government. c) If A is Pareto efficient and B is Pareto inefficient, A must be a Pareto improvement over B.Indicate whether the statement is true or false, and justify your answer.A Coasian approach may not succeed in achieving a socially optimal level of organ transactions.What does Coase mean by "the reciprocal nature" of the problem of negative externalities? the avoidance of harm done by one party causes harm to that party all people hurt all other people people take turns hurting each other
