1. In markets, the invisible hand allocates resources efficiently
a.
in all cases.
b.
when the buyers and sellers are the only interested parties.
c.
when there are positive externalities, but not when there are negative externalities.
d.
when there are negative externalities, but not when there are positive externalities.
2. For the purpose of protecting the environment, upon which of the following approaches do we rely more and more as
time goes by?
a.
adherence to the notion of the invisible hand
b.
command-and-control policies
c.
the development and enforcement of regulations
d.
the requirement that decision makers bear the full costs of their actions