Which of the following statements best defines private costs?
A) They are internal in the sense that the buyer or seller must explicitly take them into account.
B) They are costs borne by people other than those who commit the action.
C) They are synonymous with social costs.
D) They represent explicit costs incurred by producers in the private sector.
Answer: A
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Many countries impose tariffs or quotas to protect the domestic industry from competition
a. True b. False Indicate whether the statement is true or false
Joseph Gallo poured two glasses of wine from the same bottle but put a more expensive price tag on one glass than on the other. He let people test both and asked them which they wanted, and most wanted the more expensive glass, not knowing that both had come from the same bottle. This result indicates that firms should:
A. be careful about lowering the price of their product, because consumers may assume that a lower price means lower quality. B. always raise the price of their product. C. never lower the price of their product. D. be careful about raising the price of their product, because the law of demand is always valid.
Refer to the information provided in Figure 5.5 below to answer the question that follows.
Figure 5.5Refer to Figure 5.5. As the price of good W increased, the demand for good Y shifted from D1 to D2. The cross-price elasticity of demand between W and Y is
A. negative. B. zero. C. positive. D. indeterminate from this information.
Externalities are only inefficient when they impose a cost. They are not inefficient when they bestow a benefit.
Answer the following statement true (T) or false (F)