Assume a company has a cafeteria where it lets all its workers eat without making them pay up front. Instead, at the end of the month the total cost of eating at the company cafeteria is added up and divided by the total number of workers
This amount is then deducted from each worker's paycheck. Explain how this practice may lead to a negative externality.
Since each person faces a marginal cost of zero of dining of zero. This will lead many workers to eat more than they otherwise would if they faced the true cost of their meals. This could result in many of the workers overeating that may make for a less healthy workforce.
You might also like to view...
Suppose the government increases the corporate income tax rate. This is
A) an expansionary fiscal policy that will shift the aggregate demand curve to the right by an amount equal to the initial change in corporate income tax revenue times the spending multiplier. B) a contractionary fiscal policy that will shift the aggregate demand curve to the left by an amount equal to the initial change in investment times the spending multiplier. C) a contractionary fiscal policy that will shift the aggregate demand curve to the left by an amount equal to the initial change in the corporate income tax rate times the spending multiplier. D) an automatic fiscal policy that will shift the aggregate demand curve to the left by an amount equal to the initial change in investment times the spending multiplier.
Which of the following treaties/agreements would be associated with creating a free trade area for the European Union?
A) Treaty of Rome B) Single Europe Treaty C) Delors Agreement D) Treaty on European Union E) Schengen Agreement