An example of a negative externality is the:
A. cost you bear when your neighbor has a noisy party and does not compensate you for your discomfort.
B. decrease in income to farmers that results from a drought.
C. benefit you receive without paying when your neighbor installs a smoke detector.
D. decrease in your real income that results when photographic equipment you purchase increases in price because of increased demand by others for these items.
Answer: A
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The water and diamonds paradox can be explained by considering:
(a) Marginal Utility. (b) The difference between inferior and luxury goods. (c) Long run costs. (d) It cannot be explained.
An economy that does not trade with the rest of the world is known as a(n) ________ economy
A) command B) closed C) open D) communist
A bond issuer agrees to pay a stated nominal amount each year. An increase in the nominal interest rate will cause
A) the price of the bond to fall. B) the price of the bond to rise. C) the nominal value of the bond's coupon to rise. D) the nominal value of the bond's coupon to fall.
A drop in dollar price of British pounds means that
a. fewer dollars are needed to buy British pounds b. more dollars are needed to buy British pounds c. the mark has appreciated d. the dollar has depreciated e. British goods are now more expensive to Americans