Your neighbor has just planted some fragrant flowers. The wonderful scent drifts into your room and makes you happy.
A. This scent is an internal cost to you.
B. This is an externality since you get a benefit from your neighbor's flowers.
C. This cannot be an externality since you are enjoying the scent.
D. The social cost of this activity is entirely borne by you neighbor.
Answer: B
You might also like to view...
The difference in present value between a perpetuity that promised $1 per year starting today and one that promised $1 per year starting next year is
a. 0. b. $1. c. $1/(1 + r). d. $r/(1 + r).
Only a change in the price level can cause a movement from one point to another point along a given aggregate demand curve
Indicate whether the statement is true or false
By using the market basket approach:
A. we get a more accurate picture of the changing cost of living than by simply averaging the changing prices of goods listed in the market basket. B. we get a clearer picture of the changing cost of living than by averaging the changing prices of all goods and services produced. C. it allows us to see how cost of living is affected by the changing prices of different goods relative to how much of each good you buy. D. All of these statements are true.
The key factor that determines whether the supply of a good will be elastic or inelastic is _____.
(A) Output level (B) Consumption (C) Time (D) Price