For each of the following, indicate whether the statement is True, False, or Uncertain, and explain your answer. (No credit will be given without an explanation.) In the exchange problem, it is inefficient to give everything to one person. In the Lindahl mechanism, everyone pays the same price for a public good. The socially efficient solution is to not produce any externality.

Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter10: Externalities
Section10.3: Private Solutions To Externalities
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For each of the following, indicate whether the statement is True, False, or Uncertain, and explain your answer. (No credit will be given without an explanation.)

  1. In the exchange problem, it is inefficient to give everything to one person.

  2. In the Lindahl mechanism, everyone pays the same price for a public good.

  3. The socially efficient solution is to not produce any externality.

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