A(n) _____ is the benefit or a cost of an activity that affects third parties
Fill in the blank(s) with the appropriate word(s).
Ans: externality
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merger will usually be challenged if which of the following is expected to occur as a result of the merger?
A) an increase in consumer surplus B) competition remains after the merger C) a price decrease D) a price increase
In a market system, how are the price signals established?
A) Consumer advocacy groups establish fair prices for items, and most firms follow these pricing guidelines because they don't want to anger their consumers. B) Industry associations establish an acceptable price range for each commodity sold within the industry, and member firms are obligated to abide by association guidelines. C) The forces underlying supply and demand interact to determine a market clearing price. D) Federal legislation establishes maximum prices for most goods, and state governments regulate the prices of any remaining items.
Governments sometimes subsidize domestic industries. When this occurs
A) the governments will not impose tariffs. B) the subsidized sell less in international markets because it is more profitable to sell at home. C) the subsidized industries have an advantage on international markets relative to non-subsidized firms. For this reason, other countries often impose tariffs on the subsidized imports. D) the subsidized industries have an advantage on international markets relative to nonsubsidized firms. However, this is not an argument for imposing tariffs and tariffs would violate international agreements.
Minimum-wage laws are one reason there is always some unemployment in the U.S. economy
a. True b. False Indicate whether the statement is true or false