An externality occurs when
A) the costs of producing a good are paid entirely by the producer.
B) some of the costs of producing a good are paid by someone other than the producer.
C) the marginal social cost of an activity increases as that activity is increased.
D) Both answers A and C are correct.
B
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Refer to Figure 9-3. What is the area of domestic producer surplus after the imposition of a quota?
A) B + C B) B + E + I + J + M C) B D) E + I + J + M
The United States SRAS curve may shift to the left if we ____________________ Malaysia and the dollar ________________ against the Malaysian ringgit
A) buy raw materials from; appreciates B) buy raw materials from; depreciates C) sell finished goods to; appreciates D) sell finished goods to; depreciates
Many people fall victim to the gambler’s fallacy, even when they’re not gambling. Which of the following is an example of such a situation?
a. waiting to purchase a car until a dealership holds its annual year-end sale b. buying a puppy of the same breed as the dog you had growing up because you liked your childhood dog so much c. expecting that a couple will have a baby boy next because all their other children are girls d. driving cautiously because you have a perfect driving record that you want to maintain
Which of the following arguments for farm subsidies is most closely associated with the parity concept?
A. Although farmers produce necessities for the rest of us, they receive low incomes that are declining in real terms, and should therefore receive price and income support. B. Farmers sell their output in purely competitive markets but must buy inputs from imperfectly competitive firms. C. Farmers cannot fully insure themselves against the risks unusual to farming, such as floods, droughts, and pests. D. The "family farm" is an American institution that should be protected and nurtured.