An externality is defined as
a. the revenue generated by a firm in the external market
b. a byproduct of a good or activity that affects someone not immediately involved in the transaction
c. an additional cost of consumption that is borne by a third party
d. a cost or benefit arising from price changes
e. the value of a good or service to a consumer
B
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How does a contractionary monetary policy affect the labor demand curve in an economy?
What will be an ideal response?
Which of the following should help reduce the adverse selection problem?
A) the employer mandate provision of the Affordable Care Act B) the individual mandate provision of the Affordable Care Act C) keeping high-risk and low-risk individuals in the same health insurance pool D) all of the above
Refer to the scenario above. If there is fairness penalty of $12, ________
A) this game will no longer have a Nash equilibrium B) this game will have two Nash equilibria C) Nash equilibrium will occur when both of you choose "friend" D) Nash equilibrium will occur when both of you choose "foe"
Which of the following is not a contribution of small firms to development:
a. permit the economy to adjust to recession by hiring those laid off in the formal sector b. create employment c. source of training and skills d. use little capital e. all of the above are contributions of small firms