Which of the following would most likely generate a negative externality?
A. Employment
B. A lighthouse
C. Cigarette smoke
D. Education
Answer: C
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At a discount rate of 10 percent, what is the net present value of an investment expected to yield $1,000 per year (to be received at year end) for the next two years?
a. $1,859.41 b. $1,801.23 c. $1,735.54 d. $1,527.78
Alan Jones owns a company that sells life insurance. When he employs 10 salespersons his firm sells $200,000 worth of contracts per week, and when he employs 11 salespersons, total revenue is $210,000 . The marginal revenue product of the 11th salesperson is:
a. $20,000. b. $410,000. c. $210,000. d. $10,000.
If purchasing power parity holds, then if the price of a basket of goods in the U.S. rose from $1,500 to $2,000 and the price of the same basket in Mexico rose from 12,000 pesos to 18,000 pesos
a. inflation was higher in the U.S. than Mexico so the U.S. dollar would appreciate. b. inflation was higher in the U.S. than Mexico so the U.S.dollar would depreciate. c. inflation was lower in the U.S. than Mexico so the U.S. dollar would appreciate. d. inflation was lower in the U.S. than Mexico so the U.S dollar would depreciate.
If U.S. residents want to buy more foreign bonds, then in the market for foreign-currency exchange the exchange rate
a. and the quantity of dollars traded rises. b. rises and the quantity of dollars traded falls. c. falls and the quantity of dollars traded rises. d. and the quantity of dollars traded falls.