When a person does NOT have to pay the full costs for using a scarce resource, then there is
A. an opportunity cost in the activity for the person but not for society.
B. a negative externality.
C. a positive externality.
D. an underproduction of a good.
Answer: B
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The change in wealth during a period equals:
A. public saving + private saving - transfers. B. saving - investment + capital gains - capital losses. C. saving - capital gains + capital losses. D. saving + capital gains - capital losses.
Aimee sells hand-embroidered dog apparel over the Internet. Her annual revenue is $128,000 per year, the explicit costs of her business are $42,000, and the opportunity costs of her business are $30,000
What are the implicit costs of her business? A) $12,000 B) $30,000 C) $72,000 D) $86,000
Economic rent is a concept that can be applied
A) only to land, as that is the only resource that is in limited supply. B) only to land and natural talent. C) to any factor of production that is fixed in supply. D) to any resource or factor of production that has a supply curve with a positive (upward) slope.
Farm programs that pay farmers not to plant crops on all their land
a. hurt farmers by lowering their total revenue and hurt consumers by causing shortages of some food items. b. help farmers by cutting costs, which helps consumers by lowering food prices. c. help farmers by increasing total revenue in the market but hurt consumers by raising food prices. d. help farmers directly since they receive government payments but have no real effects on consumers.