Government invention is required to solve externality problems if ...

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Government invention is required to solve externality problems if ________.
 
  A) transaction costs associated with private negotiations are low
  B) the number of people affected by the externality is small
  C) the number of people affected by the externality is large
  D) property rights are clearly defined

Question 2

If the government offers to pay wheat farmers 1 for every bushel of wheat they market next year, in addition to the market price, the price of wheat will be
 
  A) higher than it would otherwise have been.
  B) lower than it would otherwise have been.
  C) one dollar.
  D) the same as it would otherwise have been although wheat farmers will be better off.

[raili21]

Answer to Question 1

C

Answer to Question 2

B

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Gracias!

[frankwu0507]

TYSM