1. Explain what it means to internalize an externality. 2. List the means available to get market...
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2. List the means available to get market participants to internalize their externalities.
3. Describe how a tax could remedy the overproduction of a good with a negative externality.
4. Describe how a subsidy could remedy the underproduction of a good with a positive externality.
5. State the Coase theorem.
6. Explain why the Coase theorem is significant.
7. List the problems associated with using government regulations to reduce negative externalities.
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1 An externality is internalized if the parties that generate the externalities incorporate the exte...View the full answer
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