An individual who pays for a vehicle has incurred a
A. negative externality.
B. private cost.
C. positive externality.
D. social cost.
Answer: B
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The short-run aggregate supply curve
A) is vertical. B) shows the impact changes in the price level have on the quantity of real GDP when resource prices are constant. C) illustrates the level of potential real GDP. D) shifts whenever the price level changes.
Refer to Scenario 13.16. If Gooi can move first, and Ici threatens to buy yogurt machines, no matter what Gooi does,
A) Gooi will have to buy gelato machines, so Ici will get its highest possible profit. B) Gooi will buy yogurt machines, which it otherwise wouldn't have, in order to retaliate. C) the equilibrium payoff of ($50,$50 ) will be enforced. D) Gooi will not change its behavior, because Ici's threat is not credible. E) Gooi will threaten to buy yogurt machines, no matter what Ici does, to see whether that will get the people at Ici to change their minds.
Which of the following statements is true about a downward-sloping demand curve that is a straight line?
A. The slope remains the same, but elasticity rises as you move down the demand curve. B. The slope remains the same, but elasticity falls as you move down the demand curve. C. The slope and the elasticity fall as you move down the demand curve. D. The slope and the elasticity are the same at all points.
The default-risk premium:
A. must always be greater than 0 (zero). B. is also known as the risk spread. C. is assigned by a bond-rating agency. D. is negative for a U.S. Treasury bond.