Which of the following is a TRUE statement?
A) Any property right system will yield a situation in which all externalities are internalized.
B) Voluntary agreements can always yield a situation in which all externalities are internalized.
C) Opportunity costs always exist with whoever has property rights.
D) Opportunity costs turn external costs into social costs.
Answer: C
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In this situation, the monopoly's profits are:
a. 0.40. b. 0.16. c. 0.12. d. 0.08.
Countries having comparative advantages based on land and in various natural resources are most likely to
A. experience rapid accumulation of capital. B. export products like gold, coffee, or cocoa. C. export manufactured goods. D. experience biased growth.
One problem associated with the gold standard was that
A) nations gave up control of their money supply. B) there was an incentive for individuals to hold gold at all interest rates. C) there was no fluctuation in exchange rates. D) nations could not determine their current account balances.
For a country pursuing a fixed exchange rate regime, what does the interest parity condition imply about domestic and foreign interest rates? Explain
What will be an ideal response?