Negative externalities are created when
A) an increase in the price of butterfat drives up the price of ice cream.
B) a driver leaves his car in a parking space after the meter expires and receives a ticket.
C) a driver drives recklessly on a busy highway.
D) a driver pulls over to help a stranded motorist fix a flat tire.
C
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A White House proposal to increase infrastructure spending on roads, rail lines and runways is an example of
A) expansionary fiscal policy. B) insourcing policies. C) automatic stabilization. D) contractionary fiscal policy.
Which of the following statements is TRUE regarding the textbook used in this course?
A. The textbook presents only economic theory, so no value judgments are involved in the text. B. The microeconomic section of the book includes only positive analysis while the macroeconomic section includes normative analysis. C. The textbook does not include normative statements. D. The selection of topics included in the book involves value judgments as well as economic theory.
Refer to the diagram. The vertical distance between ATC and AVC reflects:
A. the law of diminishing returns.
B. the average fixed cost at each level of output.
C. marginal cost at each level of output.
D. the presence of economies of scale.
Price elasticity of demand is the:
A. change in the quantity demanded of a good divided by the change in the price of that good. B. percentage change in price of that good divided by the percentage change in the quantity demanded of that good. C. change in the price of a good divided by the change in the quantity demanded of that good. D. percentage change in quantity demanded of a good divided by the percentage change in the price of that good.