Dina drives to work on Interstate 294 at 90 MPH, well in excess of the 65 MPH speed limit. Sandy is behind her, going 85 MPH. A state trooper pulls Dina over and gives her a speeding ticket. Sandy continues driving. If Dina had not been speeding, the trooper would have ticketed Sandy. In terms of externalities, this story shows that
a. the 10 MPH difference defines the difference bewteen a negative and positive externality
b. Sandy enjoys a positive externality
c. Dina suffers a negative externality
d. Dina's driving habits created a negative externality for Sandy
e. Sandy's driving habits created a negative externality for Dina
B
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If the cross-price elasticity of demand between two goods is 0,
a. a price change for one good will be exactly offset by a price change for the other b. neither demand curve would shift following a change in the price of one of the goods c. there is no income effect between the two goods d. the demand for each good is price inelastic e. the demand for each good is price elastic
Refer to the figure above. The net exports of the country is zero:
A) for real exchange rates below R*. B) at the real exchange rate of R*. C) for all real exchange rates. D) for real exchange rates above R*.