A landfill site produces an obnoxious odor. Homes downwind of the site rent for $1000 per month while homes upwind of the site rent for $1500 per month
If the odor is the only detectable difference between two neighborhoods, the difference in the rent is the ________ of the odor. A) social cost
B) external cost
C) private cost
D) marginal cost-benefit
E) private benefit
B
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A market situation in which a large number of firms produce similar but not identical products is called
A) pure monopoly. B) monopolistically competitive. C) oligopolistic behavior. D) perfectly competitive.
In effect, an annuity provides insurance
a. against the risk of dying and leaving one's family without a regular income. b. against the risk of living too long. c. to people who are not risk-averse. d. to people whose utility functions do not display the usual properties.
When the size of the potential loss is small, most people will
A. insure because insurance costs less than the expected loss. B. self-insure because the expected loss cannot be calculated. C. self-insure because insurance companies do not like to insure for small losses. D. self-insure because they can afford it and the expected loss less than the insurance premium.
One of the characteristics of a carbon tax is that it would
A. place the heaviest burden on high-income families. B. tend to encourage more usage of cheaper fuels like coal and less usage of expensive energy sources like nuclear energy. C. encourage energy consumers to invest in energy efficiency. D. have little effect on the emission of greenhouse gases.