When does an externality occur?
a. when one person's production or consumption of a good affects another person
b. when a producers long-run average costs fall
c. when a consumer's marginal utility from consuming a good increases
d. when international trade leads to improvement in a country's economic welfare
Ans: a. when one person's production or consumption of a good affects another person
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The table above gives the utility from pens and pencils. If the consumer has an income of $4, pens cost $1, and pencils cost $.20, what is the consumer's total utility when he or she maximizes utility?
A) 374 B) 225 C) 405 D) 365
Prior to 1921, federal agencies first submitted their budgetary requests to _____
a. the President b. the Speaker of the House c. the Congressional Budget Office d. the Treasury Department