An externality is:
A. always a benefit to the recipient.
B. always a detriment to the recipient.
C. an activity that occurs in a business which is unknown to management.
D. unintended benefits or costs imposed on third parties as a result of economic activity.
Answer: D
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Incentives are
A) potential rewards available if a particular activity is undertaken. B) ineffective as a device to get people to behave in a certain fashion. C) inappropriate ways to obtain a certain kind of behavior. D) useless when people behave rationally.
If the economy is in a recession, it means that:
A. the economy is not in long-run equilibrium. B. total output is less than potential output. C. the short-run equilibrium is to the left of the long-run aggregate supply curve. D. All of these are true.
The natural right to life, liberty and pursuit of happiness is an idea of:
a. Hayek b. Schumpeter c. Marx d. Lange e. Locke
A highly charitable person, such as Mother Theresa, will be influenced by
a. changes in benefits, but not costs. b. changes in costs, but not benefits. c. both changes in benefits and costs. d. neither changes in benefits nor costs.