1) True-False-Uncertain. Respond to following statements as True, False, Uncertain and justify your claim. Answers that do not provide justification will receive zero points. According to the Coase Theorem, government intervention is needed to solve externalities. It always makes sense when a public good is financed by the government. If A is Pareto efficient and B is Pareto inefficient, A must be a Pareto improvement over B. According to Arrow’s impossibility theorem, a democratic society will always make consistent decisions.
1) True-False-Uncertain. Respond to following statements as True, False, Uncertain and justify your claim. Answers that do not provide justification will receive zero points. According to the Coase Theorem, government intervention is needed to solve externalities. It always makes sense when a public good is financed by the government. If A is Pareto efficient and B is Pareto inefficient, A must be a Pareto improvement over B. According to Arrow’s impossibility theorem, a democratic society will always make consistent decisions.
Chapter19: Externalities And Public Goods
Section: Chapter Questions
Problem 19.8P
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1) True-False-Uncertain. Respond to following statements as True, False, Uncertain and justify your claim. Answers that do not provide justification will receive zero points.
- According to the Coase Theorem, government intervention is needed to solve externalities.
- It always makes sense when a public good is financed by the government.
- If A is Pareto efficient and B is Pareto inefficient, A must be a Pareto improvement over B.
- According to Arrow’s impossibility theorem, a democratic society will always make consistent decisions.
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