The Clear Plastic Company's plant discharges large quantities of toxic chemicals into some groundwater sources. Residents in the surrounding area have higher medical bills because of Clear Plastic's pollution. These additional medical costs represent
A) a positive externality.
B) a negative externality.
C) the company's private costs.
D) the neighboring families' external costs.
Answer: B
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The person who assumes the risks and uncertainties of business is
a. a manager of the business b. an owner of the business c. an excellent example of human capital d. an entrepreneur e. key to production, but not a factor of production
An entrepreneur
a. is an employee working in a factory b. manages a factory c. conceives of and starts a business d. contracts to work for a specific price e. estimates the risks and uncertainties of business
In the short run, a firm operating in a competitive industry will shut down if price is
a. less than average total cost. b. less than average variable cost. c. greater than average variable cost but less than average total cost. d. greater than marginal cost.
Deciding if a power company will generate electricity from wind power or coal answers the economic question of:
A. "who consumes the products produced?" B. "what products will be produced?" C. "where will the products be consumed?" D. "how will the products be produced.?"