What is marginal external cost? Give an example
What will be an ideal response?
Marginal external cost is the additional cost that is imposed on someone other than the producer of the good or service. An example is the sulfur dioxide and other chemicals emitted by utility companies in the Midwest. These pollutants travel north with the winds, causing acid rain that harms vegetation and kills fish in the Northeast of the United States.
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The Dow Jones Industrial Average is computed based on
A) thirty blue-chip stocks. B) five hundred blue-chip stocks. C) all stocks sold on the NYSE. D) all stocks sold on all organized exchanges in the United States
A lump-sum tax (a tax that is treated as a fixed cost) is placed on a monopolist. How will that affect its output and pricing decisions?
A shift in the supply curve for gasoline in the United States would result if
A. significantly more people decided to use mass transit rather than travel by automobile. B. the price of gasoline increased. C. the price of automobiles fell dramatically. D. None of the choices are correct.
Refer to the diagram. Assume that nominal wages initially are set on the basis of the price level P 2 and that the economy initially is operating at its full-employment level of output Q f . In the short run, demand-pull inflation could best be shown as:
A. a move from b to c on AS 2 .
B. a move from b to c to d.
C. a change of aggregate supply from AS 2 to AS 3 .
D. a move from b to d.