When positive externalities are present in a market, it means that:
A. private benefits are less than social benefits.
B. private benefits are less than external benefits.
C. social benefits are less than external benefits.
D. external benefits are equal to social benefits.
A. private benefits are less than social benefits.
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A financial crisis occurs when an increase in asymmetric information from a disruption in the financial system
A) causes severe adverse selection and moral hazard problems that make financial markets incapable of channeling funds efficiently. B) allows for a more efficient use of funds. C) increases economic activity. D) reduces uncertainty in the economy and increases market efficiency.
The total debt includes amounts one government agency owes to another
a. True b. False
The property of transitivity implies that a consumer always prefers to consume more of either good, holding the consumption of the other good constant
a. True b. False Indicate whether the statement is true or false
According to the Coase theorem, private markets will solve externality problems and allocate resources efficiently as long as
a. the externalities that are present are positive, not negative. b. government assigns property rights to the harmed party. c. private parties can bargain with sufficiently low transaction costs. d. businesses determine an appropriate level of production.