Which of the following statements reflects a situation in which there are external benefits?
A. John's decision to get vaccinated for smallpox reduces the chances that his neighbor Pete will get smallpox.
B. John paints his house and cleans his paintbrushes in the nearby stream.
C. John sells his car to his neighbor Pete at half the first-hand price.
D. John pays 5 percent of his income as taxes.
Answer: A
You might also like to view...
The foreign exchange market is the market on which the ________ of various nations are traded for one another.
A. currencies B. goods and services C. international financial securities D. stocks and bonds
If the MSB/MCA graph indicates that an emissions fee of $10 per unit would lead to the optimum level of emissions, but the government set a fee of $5 per unit, emissions would
A) not be reduced at all. B) not occur at all. C) be above the optimum level, but curtailed somewhat from what they would have been with no fee at all. D) be above the optimum level by 50%. E) be below the optimum level by 50%.
The amount of output that a firm decides to sell has no effect on the market price in a competitive industry because
A) the market price is determined (through regulation) by the government B) the firm supplies a different good than its rivals C) the firm's output is a small fraction of the entire industry's output D) the short run market price is determined solely by the firm's technology E) the demand curve for the industry's output is downward sloping
An example of a poverty trap is:
A. the uneducated not knowing how to further develop their economy. B. those who do not have basic immunizations not being healthy enough to develop their economy. C. the malnourished not having enough energy to develop their economy. D. All of these are examples of poverty traps.