An externality is defined as
a. an opportunity cost that is not considered, which causes inefficiency.
b. a social cost that affects parties external to a transaction.
c. a transaction which imposes a loss on one of the parties involved.
d. a "cost of doing business" that cannot be allocated to any particular good.
e. the increase in cost associated with increased production.
b
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To achieve faster growth, economies can increase income tax rates in order to increase saving rates
Indicate whether the statement is true or false
Refer to Table 4-4. The table above lists the highest prices three consumers, Curly, Moe, and Larry, are willing to pay for a bottle of champagne. If the price of one of the bottles is $24 dollars
A) Curly will receive $26 of consumer surplus from buying one bottle. B) Larry will receive $15 of consumer surplus since he will buy no bottles. C) Curly will buy two bottles, Moe will buy one bottle and Larry will buy no bottles. D) Curly and Moe receive a total of $80 of consumer surplus from buying one bottle each. Larry will buy no bottles.
Which of the following is an example of an agency concerned with social regulation?
A) Federal Communications Commission B) Securities and Exchange Commission C) Consumer Product Safety Commission D) Federal Energy Regulatory Commission
Intermediation in the financial system is the process of:
A. bringing together buyers and sellers in a market. B. negotiating terms of repayment when agreements between buyers and sellers are in default. C. government intervention in a financial market. D. an arbitrator working with government and private firms to create an efficient financial system.