Which of the following is the best example of an action that imposes an external cost?
A. Wear and tear on your car as the result of frequent use.
B. Deterioration in the average quality of a house you own as the result of poor maintenance.
C. Water pollution from an upstream factory that increases the cost of providing clean water to downstream residents.
D. A rose garden on your property from which your neighbor gets much enjoyment.
Answer: C
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Refer to Figure 9.2. A movement from point d to point b could be caused by a(n)
A) increase in government spending. B) increase in the price of oil. C) increase in taxes. D) decrease in short-run aggregate supply.
Both the Latin American countries and the sub-Saharan countries have poor economic growth records due to
A) climate. B) geography. C) colonization. D) arbitrary governance. E) indifference from the World Bank.