Question 1
________ is (are) an example of selling externality rights.
◦ Auctioning the right have a garage sale each year
◦ Direct subsidies for positive externalities
◦ Having the damaged party avoid the damage
◦ Government imposed taxes
Question 2
Governments often ________ activities that generate external ________.
◦ tax; costs
◦ subsidize; costs
◦ tax; benefits
◦ simultaneously tax and subsidize; costs