A negative externality is
A) a cost realized by the producer of a good or service.
B) anything that is external or not relevant to the production of a good or service.
C) a cost paid for by the consumer of a good or service.
D) a by-product of an activity that hurts someone who is not involved in that activity.
D
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A good's marginal social cost is defined as its
a. marginal private cost minus the value of any detrimental externality. b. incidental cost. c. marginal private cost plus the value of any taxes paid on its production. d. marginal private cost plus its incidental cost.
Which of the following will cause the demand for loanable funds to increase?
A. Households increase their rate of savings. B. The expected rate of return increases. C. The cost of funds increases. D. The expected profitability of a project declines.
If an economy has a trade policy of a fixed exchange rate, then its monetary and fiscal policies are:
A. more restricted when dealing with domestic goals. B. less restricted when dealing with domestic goals. C. independent of the trade policy. D. independent of the trade regime.
Under perfect competition, the demand curve facing the firm is determined by
A) the intersection of the industry demand and supply curves. B) the tastes and preferences of consumers. C) utility maximizing behavior on the part of consumers. D) the willingness of the firm to supply the good.