William engages in an activity that influences the well-being of a bystander. In which of the following instances does an externality arise?
a. The impact of William's activity on the bystander is adverse, and William compensates the bystander accordingly.
b. The impact of William's activity on the bystander is adverse, but William fails to compensate the bystander.
c. The impact of William's activity on the bystander is beneficial and the bystander compensates William accordingly.
d. Externalities arise in all of the above cases.
b
You might also like to view...
As the investment demand curve becomes steeper, the crowding-out effect will become smaller
a. True b. False Indicate whether the statement is true or false
_____ is the primary determinant of consumption and is usually measured in terms of current disposable income
a. Household income b. Wealth c. Expectation d. Interest rate e. Tax liability
Which of the following would tend to encourage more innovation in the United States?
A. Limits on the immigration of scientists and engineers B. Restrictions on the risk that venture capital firms can take C. Stricter enforcement of the patent laws D. Protection of manufacturing industries through tariffs and trade barriers
________ of unemployment during ________ make it easier for workers to ________ wages
A) High levels; a recession; negotiate higher B) Low levels; an expansion; negotiate higher C) Low levels; a recession; accept lower D) High levels; an expansion; accept lower