Which of the following statements is true?
A. If a buyer ends up being worse off from an exchange rather than better off as expected, this is a negative externality.
B. As long as the benefits to society from an exchange outweigh the costs to the producer of the good or service, no negative externality has occurred.
C. Secondhand cigarette smoke is an example of a negative externality.
D. As long as the benefits to society from an exchange outweigh the costs to society, no negative externality has occurred.
Answer: C
You might also like to view...
If the price of a good increases and the total revenue remains the same, the demand for the good is
A) elastic. B) inelastic. C) unit elastic. D) perfectly elastic.
If both firms plan to be in business for one-year, the Nash Equilibrium will be
a. For each firm charge LP b. For neither firm to charge LP c. For one firm to charge LP and the other HP d. None of the above.
The act of putting a new product on the market in order to make profits is called
a. invention. b. innovation. c. investment. d. development.
To "cure" their balance of payments deficits without altering exchange rates, Southeast Asian countries in 1997 were forced to create
a. more inflation. b. recessions. c. faster economic growth. d. money at an accelerated rate.