Which of the following is an example of an external cost?
A. Automobile exhaust fumes.
B. Eating a sandwich at a local deli
C. Unfair pricing behavior by a monopoly.
D. Unemployment.
Answer: A
You might also like to view...
All of the following make the use of fiscal policy less attractive EXCEPT
A) expansionary fiscal policy tends to cause inflation and offsets some of the increased consumer spending. B) that it cannot be effective, unless it is accommodated with expansionary monetary policy. C) the substantial margin of error in the value of the multiplier. D) the legislative lag, which is the time it takes for Congress and the President to pass and implement the measure. E) the crowding out effect, which is the decrease in private spending that occurs due to increased government spending.
Tobacco production is one of the more heavily subsidized industries in the United States. Suppose that as a result of intense lobbying from health-related concerns, Congress repeals the tobacco firms' subsidies. Which of the following scenarios would likely occur?
A) The tobacco firms' supply curve would shift rightward, as it would now be cheaper to produce each level of output. B) The tobacco firms' supply curve would shift leftward, since it would now cost more to produce each level of output. C) The tobacco firms would not experience any shift in their supply curves; subsidies don't affect output. D) There would be a movement along the supply curve for tobacco, but the supply curve would not shift.
A nominal appreciation of the Japanese yen (against all currencies) indicates that
A) the yen price of the U.S. dollar has increased. B) the yen price of the U.K. pound has increased. C) the number of units of foreign currency that one can obtain with one yen has increased. D) all of the above
Economists use the concept of ________ to measure how one economic variable, such as quantity, responds to a change in another economic variable, such as price
A) slope B) efficiency C) relativity D) elasticity