What is an externality?
What will be an ideal response?
An externality is a situation in which private costs diverge from social costs because there are external costs. External costs are costs not borne by the parties engaged in the exchange or by an individual engaged in a resource-using activity.
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Why would a firm prefer that a company like J.D. Power (which provides product satisfaction reviews) review its product rather than doing it within the firm?
A) J.D. Power provides less credibility. B) J.D. Power provides greater credibility. C) J.D. Power is more honest than the average firm. D) J.D. Power has a government monopoly in providing product satisfaction reviews.
The two broad fields that make up the subject of economics are:
A. microeconomics and macroeconomics. B. personal investments and business investments. C. fiscal policy and monetary policy. D. imports and exports.
Which of the following statements concerning major cycles is incorrect?
a. major cycles are characterized by wide fluctuations in business activity b. the United States has experienced five major cycles since World War II c. severe recessions in major cycles result in widespread unemployment d. during major cycles, economic activity rises and falls relative to the long-term growth trend
If the Russian ruble depreciates relative to the U.S. dollar, Russian steel becomes more expensive for American firms to purchase.
Answer the following statement true (T) or false (F)