Cameron lives in an apartment building and gets a $700 benefit from playing his stereo. Renee, who lives next door to Cameron and often loses sleep due to the music coming from Cameron's stereo, bears a $1,000 cost from the noise. At which of the following offers from Renee could both Renee and Cameron benefit from the silencing of Cameron's stereo?
a. $250
b. $550
c. $750
d. $1,020
c
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A Groves mechanism is a procedure for setting the level of a public good that:
A. induces everyone to report their preferences correctly. B. induces everyone to overstate the benefit they receive from a public good. C. induces everyone to understate the benefit they receive from a public good. D. only works if the public good in question is free of externalities.
In the last few decades, tariffs have:
A. risen by more than 20 percent in developing countries. B. fallen by more than 20 percent in developing countries. C. risen more in developing nations than in developed countries. D. risen more in developed nations than in developing countries.
The euro floats against other currencies, but the member nations of the euro have no separate national money. For this reason, Spain, that uses the euro as its currency is listed under the managed float arrangement
a. True b. False Indicate whether the statement is true or false
Which term refers to a situation where an exchange between a buyer and a seller affects a third party, who is not part of the exchange?
a. Externality b. Social cost c. Market failure d. Economic cost