What exists when the consequences of the actions of one person spill over to another person?
a. externality
b. signal
c. free ride
d. moral hazard
a. externality
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Explain why specialization and trade increases a country's overall level of consumption
What will be an ideal response?
The type of unemployment created by the normal rate of reentry and entry into the labor force is
A) frictional unemployment. B) structural unemployment. C) cyclical unemployment. D) seasonal unemployment.
Bonds differ from stocks in all of these ways except:
a. a purchase of corporate stock becomes a part owner of the corporation, while a bondholder does not b. a bondholder loans money to the corporation, which has priority for repayment, while a stockholder may lose her investment c. stockholders know with a high degree of certainty how much money they will get, while bondholders do not d. all of these are correct
The output of MP3 players should be:
A. reduced if marginal benefits exceed marginal costs. B. reduced if marginal costs exceed marginal benefits. C. increased if marginal costs exceed marginal benefits. D. reduced to zero if their unit costs exceed the unit costs of alternative products.