An externality is
A. the total cost to society of producing an additional unit of a good or service.
B. the amount a consumer pays to consume an additional amount of a particular good.
C. a cost or benefit resulting from some activity or transaction that is imposed or bestowed on parties outside the activity or transaction.
D. a problem intrinsic to public goods: The good or service is so costly that its provision generally does not depend on whether or not any single person pays.
Answer: C
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A demand curve can be thought of as
A. a graphical display of “market potential.” B. a graphical representation of the information in a demand schedule. C. showing how much people want to buy. D. a forecasting tool. E. All of these responses are correct.
A country's financial account balance decreases if
A. foreigners increase their purchases of its existing assets. B. its current account balance increases. C. its income payment inflows on foreign assets decrease. D. its domestic residents working abroad reduce the income they send home to their families.
Jane is attempting to maximize utility by selecting a market basket of goods. For each of the goods in the market basket the marginal utility per dollar spent is equal
There are some goods which are affordable but do not appear in the Jane's market basket. If Jane has maximized utility, the marginal utility per dollar spent on each of the goods that does not appear in the market basket is: A) too high. B) too low. C) zero. D) infinite. E) none of the above
If Sophia's tax liability increases from $10,000 to $15,000 when her income increases from $30,000 to $40,000, her marginal tax rate is
a. 33 percent. b. 35 percent. c. 50 percent. d. 60 percent.