With defined property rights, an externality
A) can only be corrected with government intervention.
B) will not lead to a misallocation of resources.
C) may be internalized with voluntary contracting, under certain circumstances.
D) must lead to society producing inside its production possibilities frontier.
Answer: C
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During 2015, a country reports aggregate planned expenditures of $5 trillion and an actual real GDP of $4 trillion. During 2015,
A) inventories are less than planned. B) inventories are greater than planned. C) actual aggregate expenditures are greater than real GDP. D) actual aggregate expenditures are less than real GDP. E) inventories are unaffected.
How does the decreasing use of DVD players affect the market for prerecorded DVDs?
A) The demand curve for prerecorded DVDs shifts to the left. B) The quantity of prerecorded DVDs demanded decreases. C) The quantity of prerecorded DVDs demanded increases. D) The demand curve for prerecorded DVDs shifts to the right.