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9) Which of the following activities create a negative externality? A) cleaning up the sidewalk on your block C) repainting the house you live in to improve its appearance B) graduating from college D) keeping a junked car parked on your front lawn 10) When the federal government orders firms to use particular methods to reduce pollution, it is said to be using A) command- and-control policies. B) strong-arm tactics. C) global initiatives. D) market-based policies. 11) A carbon tax which is designed to reduce pollution is an example of a A) command-and-control policy. B) government administrative rule. C) noneffective incentive. D) market-based policy. 12) Suppose a negative externality exists in a market. If transactions costs are low and parties are willing to bargain then, according to the Coase theorem A) an efficient solution can be reached only if property rights are assigned to the victims of the B) an efficient solution can be reached only if property rights are assigned to the polluters. pollution. C) an efficient solution can be reached regardless of the initial assignment of property rights. D) government intervention is critical to reach an efficient solution..

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