Which of the following is an example of an externality?
A. Drug abuse affecting David’s health
B. Sara taking a break from work
C. A transaction between two parties, affecting them alone
D. Tom’s smoking affecting his roommate’s health
Answer: D
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A price ceiling
A) is an illegal price. B) is the price that exists in a black market. C) is the maximum price that can legally be charged. D) Both answers A and B are correct. E) Both answers B and C are correct.
While cyclical majorities can lead to unstable outcomes, they generally do not because of _____
a. rational ignorance b. double-peaked preferences c. political institutions d. majority rule
Export-led growth policy involves:
A. encouraging private investment in industries that currently export goods, rather than those expanding domestically. B. favoring industries that export goods over those that only produce domestically consumed goods through high tariffs. C. discouraging imports with high tariffs. D. investing heavily in industry through tax breaks and export subsidies with the aim of selling goods around the world.
The supply curve for a productive resource wherein price provides an incentive function is:
A. Vertical B. Horizontal C. Upsloping to the right D. Downsloping to the right