John paints the exterior of his house and, as a result, his neighbor Christine is able to sell her home for $5,000 more than she could have before. John's house painting:
a. creates a negative externality for Christine.
b. shows John is a free rider.
c. results in an efficient market outcome for both.
d. creates a positive externality for Christine.
e. was poorly done.
d
You might also like to view...
The term _____ refers to the idea that the value people place on money depends on where that money comes from
a. decision making b. psychological pricing c. mental accounting d. marketing mix e. anchoring
Ceteris paribus, if the Fed raises the reserve requirement, then:
A. The money multiplier increases. B. The lending capacity of the banking system decreases. C. Excess reserves increase. D. Required reserves decrease.
The prospect of future deficits:
A. encourages government to conduct expansionary fiscal policy. B. would prompt government to vastly expand discretionary spending. C. requires a government to eliminate all entitlement spending. D. limits the ability of government to conduct fiscal policy in the near future.
If the U.S. interest rate, adjusted for people's expectation of inflation, increases sharply relative to the rest of the world, then
A) there will be a decrease in the demand for dollars in foreign exchange markets. B) there will be no change in the demand for dollars in foreign exchange markets but there will be an increase in demand for foreign currency. C) the dollar will appreciate. D) the dollar will depreciate.