An externality occurs when:
a. people other than those making the demand and supply decisions share the benefits or the costs of an activity.
b. only the people making the demand and supply decisions share the benefits or the costs of an activity
c. private costs of production equal the full social costs associated with production of a good.
d. private costs of production are ignored.
a
You might also like to view...
Firms choose the highest production indifference curve they can obtain given the lowest possible budget line.
Answer the following statement true (T) or false (F)
Division of labor has caused output to rise dramatically since the industrial revolution
a. True b. False Indicate whether the statement is true or false
An increase in autonomous consumption has the same equilibrium effect as a(n)
A. decrease in investment. B. increase in investment. C. decrease in net exports. D. increase in taxes.
According to the law of supply:
A. producers are willing to supply larger amounts of a good as its price increases. B. a direct relationship exists between the price of a good and the amount buyers choose to buy. C. an inverse relationship exists between the price of a good and the amount buyers wish to buy. D. an inverse relationship exists between the price of a good and the amount producers supply.