Which one of the following is not an example of an externality
a. Carbon dioxide emissions from a motor vehicles
d. Increased costs of mining iron ore drive up the price of steel
b. Acid rain damages wildlife habitat in a region downwind from a factory
e. Over-fishing results in the depletion of the food supply of an endangered marine mammal
c. A driver enjoys beautiful scenery while driving through a National Forest
Ans: d. Increased costs of mining iron ore drive up the price of steel
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Governments impose excise taxes on goods that have inelastic demand, such as cigarettes, more often than in other cases. Why?
What will be an ideal response?
In the housing market, rents serve the purpose of
A) making landlords rich. B) rationing the availability of existing housing. C) providing an entry by the government into the housing market. D) increasing tax collections by the community.
Suppose that Albert can buy a bond for $1,000 that matures in two years and pays Albert $1,102.5 with certainty. He is indifferent between this bond and one that has some risk but on which the interest rate is 3% higher. How much, to the nearest penny, does the riskier bond pay in two years?
a. $1,160.00 b. $1,166.40 c. $1,168.65 d. $1,169.64
A newspaper headline asserts: "Falling Demand Pushes Down Housing Prices." This headline
A. incorrectly implies that more housing will be demanded at higher prices. B. correctly implies that a decrease in demand will decrease the market clearing price. C. incorrectly implies that the price of housing will rise when demand increases. D. incorrectly implies that the demand for housing can change, whereas in fact only the quantity of housing demanded can change.