Global warming has become a major international environmental issue. Using the concept of externality, explain why countries around the world seldom reach an agreement to reduce the use of fossil fuels.
What will be an ideal response?
External benefits are positive impacts of an individual or a party's action on other people's well-being. If a country does its share to abate pollution, neighboring countries enjoy external benefits without having to pay for it. Furthermore, since such external benefits are nonexcludable, neighboring countries tend to become free-riders.
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Goods and services are sold
A) only as intermediate goods. B) by households. C) in the factor markets. D) in the product markets.
Should European nations which are not currently using the euro choose to adopt the euro as their currency, these countries would risk giving up the ability to use ________ to stabilize their economies in the event of a recession
A) contractionary fiscal policy B) expansionary monetary policy C) expansionary fiscal policy D) contractionary monetary policy
Along the portion of the consumption function that lies above the 45-degree line, saving is
A) positive. B) negative. C) equal to zero. D) equal to consumption.
Another name for a shortage is
A. equilibrium. B. excess quantity supplied. C. market clearing. D. excess quantity demanded.