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

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

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.8P

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True-False-Uncertain. Respond to following statements as True, False, Uncertain and justify your claim. According to the Coase Theorem, government intervention is needed to solve externalities. It always makes sense when a public good is financed by the government. If A is Pareto efficient and B is Pareto inefficient, A must be a Pareto improvement over B. According to Arrow’s impossibility theorem, a democratic society will always make consistent decisions.
The Lindahl model presupposes that the public good is delivered in such a way that everyone ____________ from it.
Indicate whether the statement is true or false, and justify your answer.In the presence of externalities, private and social welfare diverge.
According to the Coase theorem Group of answer choices a. the private market will usually solve externality problems, except when side payments are necessary b. under certain conditions, the private market will solve externality problems efficiently c. an externality is a form of market failure d. government intervention is necessary in order to solve an externality problem
Consider a non-rival and non-excludeable public good. The government decides whether or not to provide the good based upon a majority vote. If the good is provided all citizens pay an equal share of the cost. Evaluate the following two statements. (i) The good WILL NOT be provided if it is NOT efficient to do so. (ii) The good will be provided if it is efficient to do so. a. Both (i) and (ii) are always true. b. Neither (i) nor (ii) is always true. c. Only (ii) is always true. d. Only (i) is always true.
Indicate whether the statement is true or false, and justify your answer.The Coase theorem implies that there are no externalities.
1) 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. According to the Coase Theorem, government intervention is needed to solve externalities. It always makes sense when a public good is financed by the government. If A is Pareto efficient and B is Pareto inefficient, A must be a Pareto improvement over B. According to Arrow’s impossibility theorem, a democratic society will always make consistent decisions.
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 Coase Theorem: Select one: a. states that in some circumstances majority voting can yield inconsistent results. b. applies only to circumstances in which externalities are extensive and bargaining costs are high. c. advocates for the intervention of the government in solving externality problems. d. holds that the median voter will decide the outcome of elections. e. suggests that in some circumstances government intervention is not needed to resolve externality problems.
The Coase theorem states that if property rights exist, the number of parties is small, and transactions costs are low, there will be no externalities regardless of who owns the property rights. Select one: True False
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 drugs
If an excise tax on cigarettes offsets the negative externalities associated with smoking, it means that: a. The Pareto efficient level of smoking will decline. b. The private marginal benefit of smoking will rise. c. The privately efficient level of smoking will equal the Pareto efficient level. d. The private marginal cost of smoking will decline. 9.In the Principal-Agency relationship in health care markets, the _______ acts as the agent for the ________, the principal. a. Government; insurer. b. Insurer; government. c. Health care provider; patient. d. Patient; health care provider. In the presence of external benefits for a health care service, the private market will generally provide: a. The economically efficient level of output. b. Less than the Pareto efficient level of output. c. More than the Pareto efficient level of output. d. The answer depends on the nature of the benefits