Asked by CHELSEY MYERS on Jul 09, 2024
Verified
In any case where there is a positive externality, forming a government agency to solve the problem rarely results in an efficient outcome.
Positive Externality
A benefit that affects a party who did not choose to incur that benefit, typically not reflected in the market price, like vaccination.
Government Agency
A permanent or semi-permanent organization in the machinery of government that is responsible for the oversight and administration of specific functions.
- Analyze the effectiveness of different approaches to addressing externalities, from regulations to market-based solutions.
Verified Answer
MA
madeha arafaJul 16, 2024
Final Answer :
False
Explanation :
Positive externalities often lead to underproduction of a good or service, and government intervention, such as subsidies or the provision of the good itself, can help achieve a more efficient outcome by aligning private incentives with social benefits.
Learning Objectives
- Analyze the effectiveness of different approaches to addressing externalities, from regulations to market-based solutions.