In which of the following markets are external benefits most likely to exist?
A) in the market for gasoline
B) in the market for ball pens
C) in the market for flu shots
D) in the market for cigarettes
C
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A bank manager tells you that she doesn't create money. She just lends the money that people deposit. Explain why she's wrong
What will be an ideal response?
Appendix: An optimal incentives contract can induce the revelation of true costs in a partnership by
a. imposing penalties when costs are overstated b. offering bonus payments when costs are verified c. renewing the reliance relationship d. linking revealed cost to the partner's foregone expected profits e. enlisting third-party enforcement
The Justinian code:
a. Summarized the laws of Greece b. Was the first example of common law c. Codified the laws of the Roman Empire d. Were written by Justinian himself e. Both c and c are correct
If Ernie's individual labor supply curve is upward sloping, then Ernie responds to an increase in the
a. wage by working more hours per week. b. opportunity cost of leisure by working fewer hours per week. c. opportunity cost of leisure by taking more hours of leisure per week. d. Both a and b are correct.