A negative externality is a situation in which
A. a firm is paying in excess of the total costs of producing a good.
B. a cost associated with an economic activity is borne by a third party.
C. there is a spillover of benefits.
D. None of these.
Answer: B
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Educational services provided by public schools are:
A. excluded from GDP because they are intermediate goods. B. included in GDP at market prices. C. excluded from GDP because they are not sold in markets. D. included in GDP at cost.
Are there ever exceptions to the law of demand?
What will be an ideal response?
In the long run,
a. the natural rate of unemployment depends primarily on the level of aggregate demand.
b. inflation depends primarily upon the money supply growth rate.
c. there is a tradeoff between the inflation rate and the natural rate of unemployment.
d. All of the above are correct.
The short-run average total cost curve is U-shaped because average fixed costs ________ and average variable costs ________ eventually as quantity produced increases.
A. increase; increase B. increase; decrease C. decrease; increase D. decrease; decrease