Which of the following is an example of an external benefit?
A. More people start to install solar panels on their roofs, and as a result, electricity use goes down as does the pollution created by the generation of electricity.
B. A company opens a slaughterhouse at the end of your street.
C. The city spends $500,000 to upgrade the local jail.
D. Firms are able to reduce their costs of production by using a more efficient technology.
Answer: A
You might also like to view...
In the real world, we don't observe countries completely specializing in the production of goods for which they have a comparative advantage. One reasons for this is
A) some countries have more resources than other countries. B) production of most goods involves increasing opportunity costs. C) tastes for many traded goods are similar in many countries because of globalization. D) comparative advantage works better in theory than in practice.
The amount of output lost when the inflation rate is reduced by one percentage point is called
A) Okun's law. B) the sacrifice ratio. C) the Solow residual. D) Planck's constant.
For an imaginary economy, when the real interest rate is 5 percent, the quantity of loanable funds demanded is $100,000 and the quantity of loanable funds supplied is $100,000 . Currently, the nominal interest rate is 6 percent and the inflation rate is 2 percent. Currently,
a. the market for loanable funds is in equilibrium. b. the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded, and as a result the real interest rate will rise. c. the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded, and as a result the real interest rate will fall. d. the quantity of loanable funds demanded exceeds the quantity of loanable funds supplied, and as a result the real interest rate will rise.
Why is the aggregate expenditure model important to economists?
a. It helps explain fluctuations in the economy that can cause major disruptions. b. It illuminates methods of fostering long-term growth in the economy. c. It explains why the economy sometimes produces beyond the natural rate of real output. d. It aids economic planning by providing a measure of the level of inflation in the economy.