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Unformatted text preview: What is externality? What does negative (positive) externality mean? Is it efficient to have negative or positive externality? Compare social cost with private cost when we have a negative externality problem. 66 Compare social benefit with private benefit when we have a positive externality problem. What is the Pigouvian solution to the externality problem? Discuss the economic solutions to the pollution problem. Coasian critique What is Coase theorem? Does the initial allocation of property right matter? Matter in what way? 3 67 What is transaction cost? Give some examples of transaction cost. What is a public good problem? What is a hold out problem? What is a property rule? What is a liability rule over something? What are the advantage of the property rule? What are the advantages of the liability rule? Which rule is more efficient? What are the advantages of damages? What are the advantages of fines?...
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- Spring '08