4. According to the Coase Theorem, private solutions work for externalities if are well defined and costs are low. 5. If after you buy a car with air bags, you start to drive recklessly, it would be an example of a Moral hazard problem b. Free-rider problem c. Positive externality problem d. Tragedy of the common problem 6. Fill in the blank spaces in the table below: Quantity Total utility Marginal utility 0 2 250 430 6 580 700 10 800 7. Which economic concept explains why a large hardware store can produce at a lower average cost than a small hardware store in town? a. diseconomies of scale by constant returns to scale c. economies of scale d. Increasing marginal returns