A negative externality is created if:
A. an action harms someone not involved in the market transaction.
B. an action benefits someone not involved in the market transaction.
C. neither helps nor hurts someone not involved in the market transaction.
D. an action harms or benefits someone not involved in the market transaction.
A. an action harms someone not involved in the market transaction.
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Refer to Figure 18.1. The opportunity cost of hang gliders in the United States is
A) 1/4 of a bicycle. B) 1/3 of a bicycle. C) 3 bicycles. D) 4 bicycles.
Which of the following goods might, under the right circumstances, be substitutes for love?
A) Power B) Wealth C) Notoriety D) All of the above. E) Trick question: there are no substitutes for love.
Because knowledge capital is nonexcludable and nonrival, firms have an incentive to ________ the research and development of other firms
A) free ride on B) ignore C) not use D) make bids on
If a local government collects taxes of $500,000, has $350,000 of government consumption expenditures, makes transfer payments of $100,000, and has no interest payments or investment, its budget would
A) show a surplus of $150,000. B) show a surplus of $50,000. C) be in balance with neither a surplus nor a deficit. D) show a deficit of $50,000.