There is an externality present only when
A. private costs or benefits diverge from social costs or benefits.
B. private costs equal social costs.
C. private costs equal social benefits.
D. private benefits equal social benefits.
Answer: A
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Describe three ways that private insurance companies deal with the moral hazard problem
What will be an ideal response?
The average price of goods and services in the economy is also known as
A) the cost of living. B) the inflation rate. C) a market basket. D) the price level.
We can derive market demand for pears by
a. adding up all the prices people are willing to pay for pears b. multiplying the number of people times the price of pears c. adding up the number of pears that producers are willing to sell d. multiplying the number of pears by the price of pears e. adding up all the individual demands for pears
Any factor that reduces resource availability causes
a. the aggregate demand curve to shift to the right b. the aggregate demand curve to shift to the left c. the aggregate supply curve to shift to the right d. the aggregate supply curve to shift to the left e. a movement to the left along the existing aggregate supply curve