A negative externality exists when
A. a person's or group's actions cause a benefit that is felt by others.
B. a person's or group's actions cause a cost that is felt by others.
C. market output is less than socially optimal output.
D. a and c
E. b and c
Answer: B
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Unlike an accountant, an economist measures costs on a(n) ________ basis
A) explicit B) replacement C) historical D) conservative
Economic analysis indicates that environmental quality
a. is something that people value, and therefore are willing to pay for. b. should always be regulated by the government. c. is something people should be forced to pay for no matter what their income levels. d. is not important to most people.
The countries that dominated world manufacturing in the 1700s were overtaken by 1900 and are now considered struggling nations. Economic structuralists say this happened because Europe developed its economy by
a. establishing capital markets for technologies and industries. b. creating political systems that encouraged innovation and investment. c. conquering and impoverishing the rest of the world. d. letting commerce flourish rather than controlling it.
Keynesians believe a change in the money supply cannot lower the unemployment rate.
a. true b. false