In general, an externality is created when
A) people are affected (other than by price) by a transaction which they were not part of.
B) firms produce a product of low quality and consumers don't like it.
C) firms have to pay for polluting the environment.
D) the government subsidizes education.
A
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High money prices for scarce goods
A) are one among many possible causes of their scarcity. B) are the basic cause of their scarcity. C) are the effect of their scarcity. D) have nothing to do with their scarcity, because almost all goods are scarce.
Brazil's export record in 1999 illustrated the principle that
A) a large country will tend to have few exports. B) a small country will tend to have a high export ratio. C) protectionist policies tend to discourage exports. D) export-promoting policies do not tend to work. E) import substitution policies helped the Brazilian economy.
You decide to drive your car on a long road trip of 1,500 miles. The opportunity cost of driving your car:
A. is the amount of money spent on gas. B. is zero because the car is paid for. C. includes lost wages you could have earned instead of driving. D. the total expenses of the trip in the end.
At its present rate of output, 200 units, a perfectly competitive firm has total cost of $10,000 . marginal cost of $38, and fixed cost of $2,000 . and it charges the market price of $38 per unit. To maximize profit or minimize loss, this firm should
a. increase output b. reduce output but not to zero c. maintain the present rate of output d. shut down e. raise the price