Social costs are
A) private costs plus any external costs.
B) the costs of the externality only.
C) costs incurred when common property is used.
D) the costs associated with reaching and enforcing agreements.
Answer: A
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Suppose Panama produces only two goods, bananas and hats. If Panama has a comparative advantage in bananas, a move toward free trade will
A) benefit hat workers, harm banana workers, but harm the nation as a whole. B) harm hat workers, harm banana workers, but benefit the nation as a whole. C) harm hat workers, benefit banana workers, but benefit the nation as a whole. D) benefit hat workers, harm banana workers, but benefit the nation as a whole.
In competitive markets, buyers
a. are price takers, but sellers are price setters. b. are price setters, but sellers are price takers. c. and sellers are price takers. d. and sellers are price setters.