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Author Question: When cost externalities exist, an optimal equilibrium can be attained if the government A) ... (Read 22 times)

mspears3

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on: Jul 1, 2018
When cost externalities exist, an optimal equilibrium can be attained if the government
 
  A) restricts production.
  B) levies a tax for the difference between private costs and social costs.
  C) prohibits production.
  D) All three above
  E) Both A and B

Question 2

Investment in safety at the firm level poses a prisoners' dilemma because
 
  A) if each firm plays its dominant strategy, joint profits are maximized.
  B) if each firm plays its dominant strategy, joint profits are not maximized.
  C) neither firm has a dominant strategy.
  D) the Nash equilibrium is not achieved.


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chevyboi1976

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Reply #1 on: Jul 1, 2018
Answer to Question 1

E

Answer to Question 2

B


mspears3

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Reply 2 on: Jul 1, 2018
Gracias!

amandanbreshears

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Reply 3 on: Yesterday
Excellent

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