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1. A beneficial spillover is known as a: Negative externality Positive Externali

ID: 3416386 • Letter: 1

Question

1.

A beneficial spillover is known as a:

Negative externality

Positive Externality

Neutral Externality

None of the above

2.

Potential solutions for addressing negative externalities include:

Taxation

Regulation

Property Rights

All of the above

3.

What is one problem with using taxation as a solution to an externality problem?

Taxes encourage more production.

Government won't be able to find a way to spend all the new tax revenue.

Monitoring can be costly.

4.

A property rights solution works when the following three characteristics are present:

Well defined, divisible and defendable

Unenforceable, ambiguous and redundant

Arbitrary, complicated and excessive

Property rights are never a solution

Negative externality

Positive Externality

Neutral Externality

None of the above

2.

Potential solutions for addressing negative externalities include:

Taxation

Regulation

Property Rights

All of the above

3.

What is one problem with using taxation as a solution to an externality problem?

Taxes encourage more production.

Government won't be able to find a way to spend all the new tax revenue.

Monitoring can be costly.

4.

A property rights solution works when the following three characteristics are present:

Well defined, divisible and defendable

Unenforceable, ambiguous and redundant

Arbitrary, complicated and excessive

Property rights are never a solution

Explanation / Answer

1. Positive Externality

2. all the above

3.Monitoring can be costly.

4. Well defined, divisible and defendable