The free-rider problem and the tragedy of the commons can rely on strong social norms to help reframe the decision_____by imposing_____on people who fail to pay or overuse the resource. -trade-offs, costs Social norms can solve the tragedy of the commons by: increasing cost or reducing benefits of consumption.
Under normal circumstances, individuals or firms provide the things people want. Which of the following are some ways in which circumstances might not be normal? -Market failure -Goals other than profit -Intervention
Question: Due to limits on our time, money, and effort, we are best off when we allocate our time, money, and effort with the objective of maximizing profit. O according to the opportunity costs of our choices. O according to what society as a whole would want. This problem has been solved! Who are the experts?
-private bargaining will achieve the optimal output. -the Coase Theorem. One problem with Pigovian taxes is: setting the tax at the right level. Examples of public policy that can use subsidies to solve an externality problem include: