Which of the following statements is false?
A. A positive externality is internalized if the person that generated the externality incorporates into his or her own private cost-benefit calculations the external benefits that third parties receive.
B. Internalizing externalities is not the same as adjusting for externalities.
C. An externality has been completely internalized if the socially optimal output emerges.
D. Assigning property rights is one way to internalize externalities.
Answer: B
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If a U.S. firm invites foreign officials to an industry conference and pays for foreign officials to have a modest lunch at the conference, the Foreign Corrupt Practice Act (FCPA) would ________ consider the lunch to be a facilitating payment and would ________ consider the act to be illegal.
A) likely; likely B) likely not; not likely C) likely; not likely D) likely not; likely
A ______ cost is ______ if the firm incurs the cost even if it produces no output.
A. fixed; sunk B. fixed; explicit C. variable; sunk D. fixed; avoidable
If the price of inputs falls and the level of consumer indebtedness rises:
a. Price index falls, and the change in real GDP is uncertain. b. The change in price index is uncertain, and real GDP rises. c. Price index rises, and the change in real GDP is uncertain. d. Price index falls, and real GDP rises. e. Price index falls, and real GDP falls.
Explain how the asset-price channel of monetary policy works in real estate markets.
What will be an ideal response?