Your neighbor has just planted some fragrant flowers. The wonderful scent drifts into your room and makes you happy
A) This scent is an internal cost to you.
B) This cannot be an externality since you are enjoying the scent.
C) This is an externality since you get a benefit from your neighbor's flowers.
D) The social cost of this activity is entirely borne by you neighbor.
C
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The Employment Act of 1946 reflects which one of the following functions of government?
A) providing a legal system B) improving economy-wide stabilization C) correcting externalities D) providing public goods
Refer to the above graph. Suppose that a competitive firm in long-run equilibrium along MRP2 faces a market wage rate of W0. If the price of the firm's product increases, other things remaining the same, the effect of this change in price would be to:
A. Increase the firm's demand for labor from MRP2 to MRP3
B. Decrease the firm's demand for labor from MRP2 to MRP1
C. Move along MRP2 from point A to point B
D. Move along MRP2 from point B to point A