A negative externality exists when ______.
a. a situation occurs where an informed party benefits in an exchange by taking advantage of knowing more than the other party
b. the available information is initially distributed in favor of one party relative to another in an exchange
c. costs spill over to an outside party who is not involved in producing or consuming the good
d. benefits spill over to an outside party who is not involved in producing or consuming the good
c. costs spill over to an outside party who is not involved in producing or consuming the good
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Many countries find it difficult to achieve economic growth. This is because economic growth
A) depends on technological change and technological change depends on noneconomic factors such as the growth rate of scientific knowledge. B) is not understood well by economists, so it is difficult to advise policy makers on the best policies to pursue. C) requires saving, and saving means less consumption today. A poor country may find it difficult to consume less today. D) appears to be predetermined and not subject to factors that policy makers can have any affect on.
Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour
A) Brenda has an absolute advantage in the production of X and Y. B) Agnes has a comparative advantage in the production of Y. C) Brenda has a comparative advantage in the production of X. D) Brenda cannot gain from trade.
The ratio of total output to the total number of worker hours measures
A. the ratio of labor cost to total cost. B. labor force participation. C. productivity. D. capital per worker.
Engineers for The All-Terrain Bike Company determine that a 10% increase in all inputs will cause an equal percentage increase in output. Assuming that input prices remain constant, you correctly deduce that such a change in inputs will cause ________ as output increases.
A. average costs to decrease B. average costs to increase C. marginal costs to increase D. average costs to remain constant