A market transaction causes an externality if someone
A. directly involved in the transaction receives uncompensated benefits or costs from it.
B. not directly involved in the transaction receives uncompensated benefits or costs from it.
C. directly involved in the transaction seeks legal assistance to ensure that the transaction is carried out.
D. not directly involved in the transaction interferes in it by imposing regulations or product standards.
Answer: B
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In national income accounting, (S + T) is
A) the portion of total income not consumed. B) net national product. C) the methods of financing the government deficit. D) the final output firms absorb as investment.
Refer to the table below. If Stuffed Pies is currently producing 11 units of quality, to maximize profit, Stuffed Pies should ________ the units of quality.
Stuffed Pies is a frozen calzone manufacturer. The table above summarizes Stuffed Pies' marginal revenue and marginal cost of quality at various quality amounts.
A) not change
B) decrease
C) increase
D) increase by 50 percent
The current system of international finance is a
a. gold standard b. fixed exchange rate system c. floating exchange rate system d. managed float exchange rate system e. pooled currency exchange system
Average cost regulation of a natural monopoly: a. generates economic losses for the seller
b. necessitates a subsidy payment to the firm. c. creates incentives that tend to shift ATC curves in an upward direction. d. imposes a price that is less than marginal cost.