Briefly explain what is meant by the term "externality" and how it occurs. Illustrate with examples
An externality occurs when a market transaction affects a third party who is not involved in the transaction. Externalities, which are sometimes called spillovers, can be positive or negative.
Examples of negative externalities are a neighbor's barking dog and noise from a nearby highway. An example of a positive externality includes a visually appealing flower garden or landscape.
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When the Fed increases the quantity of assets it owns, it is said to be engaging in
A) credit easing. B) forward guidance. C) quantitative easing. D) a maturity extension program.
A monopolist faces the least price-elastic demand curve because:
a. the consumers have only one place to buy the good. b. the monopolist produces a standardized product. c. the monopolist undertakes a huge expenditure to produce the product. d. the monopolist supplies to an insignificant portion of the market. e. the monopolist produces an absolutely necessary good having close substitutes.
Peruvian economist Hernando de Soto claims the ________ in Latin America results in "dead capital."
A. strong titling system B. generally weak currencies C. general lack of strong national defense D. weak titling system
Use the following market data to answer the question below.Price per UnitQuantity Purchased by ConsumerQuantity Sold by Producer$52,0000101,800300151,600600201,400900251,2001,200301,0001,500In the market shown in the table, the equilibrium quantity is
A. 1,400. B. 1,200. C. 900. D. 1,600.