A noisy party that keeps neighbors awake is an example of a
A) negative production externality.
B) positive production externality.
C) negative consumption externality.
D) positive consumption externality.
E) Both answers B and C are correct.
C
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Which of the following could cause the production function to shift upward?
a. A decrease in the capital stock b. An increase in the capital stock c. An increase in population d. A decrease in population e. An increase in transfer payments
If mutual interdependence among firms is present, each profit-maximizing firm in the market
a. produces a product that must be identical to the products of its rivals. b. must consider the reactions of its rivals when it determines its price policy. c. faces a perfectly elastic demand curve for its product. d. faces a perfectly inelastic demand curve for its product.