Which of the following describes a positive externality?
A) John Henry paints the outside of his house in order to increase its market value just before he puts the house up for sale.
B) People who do not attend college still benefit from others who receive a college education.
C) The government imposes a tax on cigarettes in order to discourage smoking among teenagers.
D) Mary volunteers to drive her neighbor's children to soccer practice.
Answer: B
You might also like to view...
When the anticipated rate of inflation is 2 percent and the real rate of interest is 4 percent, the nominal rate of interest is
A) 0 percent. B) 1 percent. C) 2 percent. D) 6 percent.
Which one of the following will shift the consumption function downward?
a. An increase in disposable income. b. A decrease in disposable income. c. Legislation making credit harder to obtain. d. Lower tax rates. e. A technological breakthrough.
In this graph, what has changed from equilibrium level E1 to equilibrium point E3?
a. Output has increased.
b. Output has decreased.
c. Price level has increased.
d. Price level has decreased.
In which of the following cases will the effect on equilibrium output be indeterminate (i.e., depend on the magnitudes of the shifts in supply and demand)?
A. Demand increases and supply increases B. Demand decreases and supply decreases C. Demand remains constant and supply increases D. Demand decreases and supply increases