Question

Which of the following does NOT inhibit the ability of voluntary exchange to internalize external costs?...

Which of the following does NOT inhibit the ability of voluntary exchange to internalize external costs?

a. high transaction costs
b. clear property rights
c. large numbers of people affected by the external cost, but by a small amount each
d. the free-rider problem
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Answer #1

b. clear property rights

Explanation: Clear property rights, in fact, helps in internalizing the external costs through the market mechanism.

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