8/ When there is a significant positive externality associated with some good, what is also true?

a. there are Pigouvian taxes imposed on that good there is an under allocation of resources to that good

b. there are low profits to produce that good

c. there are subsidies for that good

9/ When a good is non-excludable and rival, the Tragedy of the Commons can occur. True or False?

10/ Suppose you know the following information:

Private marginal cost = $3

Social marginal cost = $5

Private marginal benefit = $4

Which of the following is true about the market?

a. There is an underallocation of resources in this market

b. There is an overallocation of resources in this market

c. This market is eifficient.

11/ When is it most likely that Coasian Bargaining will work to resolve an externality problem?

a. When there are lots of people involved

b. When neither party can use the legal system

c. When the value of the externality is large.

d. When property rights are well defined and bargaining costs are low

13/ The problem of public goods can be overcome by government provision of the good. True or False

14/ A firm with market power has a flatter demand curve than a perfectly competitive firm. or True False