Explain why a producer who is causing external costs does not have the incentive to reduce these costs
What will be an ideal response?
The answer lies in the fact that the costs are external. These are not costs borne by the producer. The producer responds to the costs he or she must pay and external costs are paid by someone else. Hence the producer has no incentive to decrease the activity that is creating the external cost because the activity costs the producer nothing.
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A _________________________ is required when the location of comparable property is either superior or inferior to the location of subject property.
Fill in the blank(s) with the appropriate word(s).
Why is it that the private market fails to provide the efficient quantity of a public good?
a. because it is impossible to force those who benefit from the good to pay for it b. because public goods are always large-scale projects that require government financing c. because there are external costs associated with the provision of a public good d. because there are uninsurable risks associated with a public good
In the above figure, assume d1 is the demand curve faced by this firm. Which is TRUE?
A. This firm's total costs equal EJA0. B. This firm is breaking even. C. This firm is experiencing an economic loss. D. This firm is earning an economic profit.
Incentives are an important aspect to determine whether multiple tasks should be combined into one job or not. How can monetary incentives help and/or hinder the process of getting a job done, particularly if it is made up of several tasks?
What will be an ideal response?