The government might provide a subsidy when
A) a negative externality exists.
B) an effluent fee has been unsuccessful.
C) it wants to increase the amount of a good consumed.
D) it wants to transform a negative externality into a positive externality.
C
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The practice of spreading one's wealth over a variety of different financial investments in order to reduce overall risk is called:
A. diversification. B. following the risk premium. C. allocation. D. risk reservation.
Another name for internal cost is
A) private cost. B) social cost. C) psychological cost. D) marginal cost.
In an enforceable contract one or both parties could invest too little in relationship-specific assets that increase the economic value their joint efforts can create
Indicate whether the statement is true or false
If nation A has a comparative advantage over nation B in the production of a product, this implies:
A. it requires fewer resources in A to produce the good than in B. B. the cost of producing the good in terms of some other good's production that must be sacrificed is lower in A than in B. C. that nation B could not benefit by engaging in trade with A. D. that nation A could not benefit by engaging in trade with B.