Negative externalities are costs incurred by: i. buyers ii. sellers iii. someone other than buyers or sellers
a. (i) only
b. (ii) only
c. (iii) only
d. both (i) and (ii)
c
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A new law applied to a competitive market that requires that laid off workers be paid a large severance payment will
A) not generate a deadweight loss. B) increase total welfare. C) increase consumer surplus in the market. D) decrease consumer surplus in the market.
A monopoly has
a. A perfectly elastic demand curve b. A perfectly elastic supply curve c. An inelastic demand curve d. A more elastic demand curve than a competitive firm
When the Fed buys a Treasury bill from the public, how does it usually pay for the T-bill?
a. by writing a check on a commercial bank account b. by printing new Federal Reserve notes c. by creating new reserves in bank accounts d. by prepaying taxes into the Treasury's account
National defense is considered a public good because there appears to be no limits to the nonrivalry-in-consumption characteristic, and exclusion of nonpayers is impossible. Are there any other goods that so perfectly meet both public goods criteria?