Asked by Poppin galaxy on Jun 28, 2024

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Two types of private solutions to the problem of externalities are

A) charities and the Golden Rule.
B) charities and subsidies.
C) the Golden Rule and taxes.
D) taxes and subsidies.

Private Solutions

Individual or business-driven approaches or measures taken to resolve issues without the need for government intervention.

Externalities

Externalities are the positive or negative effects of economic activities on third parties that are not reflected in the cost of the goods or services involved.

Golden Rule

A principle denoting the optimal level of saving in an economy that results in the highest possible steady-state level of consumption.

  • Apply the Coase theorem to real-world externality problems and private solutions.
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ZK
Zybrea KnightJul 03, 2024
Final Answer :
A
Explanation :
The Golden Rule (treat others as you would like to be treated) and charities are private solutions to externalities because they rely on individual or private organization actions rather than government intervention. The Golden Rule can encourage individuals to consider the impact of their actions on others, potentially reducing negative externalities. Charities can address externalities by providing goods or services that have positive external effects.