The reason externalities distort the allocation of resources is that
a. too few goods are usually produced.
b. firms often go out of business because of the externality.
c. a firm's private costs do not reflect the social cost of production.
d. regulating externalities uses scarce resources.
c
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In order to change the money supply, the Fed might use all of the following tools except:
A. discount window. B. reserve requirement. C. open market operations. D. deficit spending.
From 1970 to 1998 the U.S. dollar
a. gained value compared to the German mark because inflation was higher in the U.S. b. gained value compared to the German mark because inflation was lower in the U.S. c. lost value compared to the German mark because inflation was higher in the U.S. d. lost value compared to the German mark because inflation was lower in the U.S.
Which statement about the structure of the Federal Reserve System is true?
a. It is made up of 12 separate banks spread around the country. b. It is a single bank located in New York. c. It is made up of 12 linked banks located in the eastern states. d. It is a single bank located in Washington D.C.
The relationship between the price of a good and the quantity people are willing and able to purchase is:
A) supply. B) demand. C) equilibrium. D) disequilibrium.