In general, an externality is created when

A) people are affected (other than by price) by a transaction which they were not part of.
B) firms produce a product of low quality and consumers don't like it.
C) firms have to pay for pollution the environment.
D) the government subsidizes education.


A

Economics

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A) outsourcing B) divestiture C) backward integration D) forward integration

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A firm's demand for labor depends on, in part, the demand for the firm's product. To summarize this idea, economists say that the demand for labor is:

a. derived demand. b. marginal demand. c. secondary demand. d. monopsonistic demand.

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According to the Taylor Rule, if the inflation rate is 3 percent and the GDP gap is 2 percent, what does the federal funds rate target equal?

A) 8.5 percent B) 5.5 percent C) 3.5 percent D) 6.5 percent

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Which of the following can reduce the level of long-run economic growth?

A. A decrease in deficit spending by the government. B. An increase in government safety regulations. C. An increase in the savings rate. D. Government enforced property rights.

Economics