Question

Policy interventions generally attempt to correct some negative externalities. Provide at least one example of a negative economic externality.

Education is an example of a positive externality

True

False

Which of the following are not true about economic externalities?

		externalities are market outcomes not captured by the individual actors market exchanges
		externalities can be have both positive and negative outcomes
		policy interventions designed to correct market externalities always work
		externalities are part of capitalism

Policy interventions designed to mitigate economic externalities generally involve difficult trade-offs betweenconflicting objectives

True

False

The policy tool of "social regulation" is one of the least controversial methods used to mitigate economic externalities

True

False

Answer 1

-example of negative externality is pollution generated by many factories and firms due to their production process.

- true

Education is an example of positive externality

- externalities are a part of capitalism

This statement is not true about externality.

- true

Externality is mitigated with regulations that involve trade off between conflicting objectives such as economic growth and regulating externality.