When dealing with negative externalities, what is meant by the term "internalizing an externality"?
What will be an ideal response?
Internalizing an externality refers to transferring the external costs to the producer that generates the negative externality.
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"When economies experience high levels of inflation, the ability of money to act as a unit of account diminishes, and it becomes harder to make decisions." Which of the following costs of inflation does this statement describe?
a. Menu costs b. Shoe-leather costs c. Unit-of-account costs d. Time costs
When a business purchases a $50,000 computer system by writing a check, the business's balance sheet will:
A. show an increase in assets and liabilities for $50,000. B. not reflect any increase in assets or liabilities, only a change in the composition of assets. C. only show an increase in assets of $50,000. D. only show an increase in liabilities of $50,000.
For a given increase in supply, the condition of demand that will result in no change in quantity is when demand is
A. perfectly inelastic. B. perfectly elastic. C. inelastic. D. elastic.
Pure economic rent is
A) a payment to a resource owner over and above what is necessary to keep the resource in its current use. B) a payment to a resource owner just sufficient to keep its supply constant. C) the inverse of economic profit. D) the competitive rental rate on capital.