When the costs of an action are NOT fully borne by the two parties engaged in a transaction, this is called a(n)
A) externality.
B) opportunity cost.
C) property right.
D) internal cost.
Answer: A
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A consumer purchases housing (H) and spends the remainder of income on the composite good (C). The government is considering one of two policies. Policy A taxes housing by $50 per unit consumed
With the tax in place, the consumer purchases 100 units of housing. Policy B collects a lump-sum tax of $5,000 from the consumer's income. Compare the effects of the policies on the consumer's utility/well-being and the amount of housing and composite goods purchased.
The horizontal dotted line is
A. a price ceiling.
B. a price floor.
C. either a price ceiling or a price floor.
D. neither a price ceiling nor a price floor.
Fluctuations in employment and output result from changes in
a. aggregate demand only. b. aggregate supply only. c. aggregate demand and aggregate supply. d. neither aggregate demand nor aggregate supply.
Firms in an oligopoly market tend to be ____ and have ____ barriers to entry.
a. large (relative to the total market); high.
b. large (relative to the total market); low.
c. small (relative to the total market); high.
d. small (relative to the total market); low