Costs that spill over to third parties are called
A) opportunity costs.
B) external costs.
C) variable costs.
D) public costs.
B
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An activity that would not be included in GDP would be:
A. a sweater you knit for your roommate for her birthday. B. getting tomatoes from your garden and making salsa with them. C. paying a company forcleaning your house. D. None of these would be included in GDP.
If there is something extra bad about local consumption of a product, then a tariff can be good for the country because
A. the tariff revenue is invested in the production of substitute products. B. the tariff leads to higher domestic price for the product. C. the tariff makes all residents richer. D. the tariff brings down the domestic price of the product.
Variable costs are relevant for
A. short-term everyday decision making. B. businesses only. C. long-term strategic planning. D. calculating fixed cost percentages.
Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question.
Prior-to-trade (autarky) consumer surplus equals area(s)
A. A + B + C. B. E + F. C. A + B. D. A.