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Q: What are solutions to externalities?
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What are the solutions to market failure?

ADDRESSING EXTERNALITIES: this involves a)social sanctions b)ethical/moral values c)voluntary organisations like charities d) contract between parties for addressing any arising externalities e) internalization which involves teaming up all activities with possible externalities at one firm so tht they do not arise


What is government's role in controlling externalities in the American economy?

Government tries to encourage positive externalities and limit negative externalities..


What is government role in controlling externalities in the American economy?

Government tries to encourage positive externalities and limit negative externalities..


What can be private solutions to externalities?

While quite often, government intervention is required to remedy negative externalities, there are other solutions. This would be in the private sector. There moral codes and social sanctions can offset the problem. Example: Do not litter becomes a moral code to remedy the litter-pollution problem.Charities that provide funds to environmental groups and to colleges to study the problem. Additionally, there can be private markets that check self-interest and create efficient mergers.


Why does alcohol have negative externalities?

Alcohol has negative externalities because it has the capacity to cause health problems


What statement about externalities is false?

Only the private sector can create both positive and negative externalities.


Negative externalities result in a welfare loss but positive externalities result in a welfare gain?

you bet


What is internalising externalities?

Externalities can be internalised by bringing the cost home to the producer or consumer so that they have to pay for clean-up.


What is the economic term for the indirect effects of markets that are not corrected within the markets?

Externalities. A more proper definition for an externality is a transaction between two economic agents which affects a third, non-participating agent. Whether or not externalities are corrected for in a market is a matter of debate in economic theory.


How do property rights affect externalities and market failure?

Externalities and market failure will result from the difficulty of enforcing property rights.


What is governments role in controlling externalizes in the American economy?

Government tries to encourage positive externalities and limit negative externalities..


What is government's role in controlling externalizes in the American economy?

Government tries to encourage positive externalities and limit negative externalities..