With defined property rights, an externality
A) can only be corrected with government intervention.
B) will not lead to a misallocation of resources.
C) may be internalized with voluntary contracting, under certain circumstances.
D) must lead to society producing inside its production possibilities frontier.
C
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"Higher ethanol production definitely and directly raises the price of corn," said USDA economist Ephraim Leibtag. In the long run in the corn market, what is TRUE if the production of ethanol increases?
A) Existing corn farmers will exit the market and decrease the market price. B) New corn farmers will enter the market and increase the market price. C) Existing corn farmers will exit the market and increase the market price. D) New corn farmers will enter the market and decrease the market price.
The text discusses unions in the context of the New Deal. It concludes that there was _____ in organized labor's relationship with government because _______
a. deterioration; Roosevelt's early speeches had created excessively high expectations. b. an improvement; labor gained the right to strike and organize free of employer interference. c. deterioration; organized labor was made subject to the same controls as big business. d. an improvement; military preparations reduced unemployment.